In a modification aimed at aiding businesses hardest hit by the Coronavirus pandemic, President Joe Biden has announced a two-week period in which only businesses with fewer than 20 employees will be able to apply for the Paycheck Protection Program (PPP).

The change takes effect on Wednesday, February 24, and will extend for a two-week period. In a statement, the Biden Administration said the move is designed to help the 98% of small businesses that have fewer than 20 employees and generally have a harder time collecting the required paperwork and ultimately obtaining a PPP loan than larger businesses with more staff, resources, and infrastructure to work through the process. Just as importantly, it’ll force lenders to focus on small businesses instead of larger clients.

In addition to the two-week exclusive window of access to PPP, the Biden Administration also announced a host of other PPP program changes to facilitate easier access to relief for small businesses and sole proprietors.

The changes include:

• A pending modification to the PPP loan calculation specifically for self-employed individuals, sole proprietors, and independent contractors. The formula hasn’t been announced as of this writing, but the administration plans to offer the modified formula to qualifying business owners in the first week of March.
• Small business owners who have a non-fraud felony on their records are now able to apply for a PPP loan.
• Small business owners that are delinquent on their federal student loan payments are also now able to apply for a PPP loan.
• Non-citizen small business owners who are lawfully living in the U.S. may now use individual taxpayer identification numbers to apply for a PPP loan.
• A $1 billion fund has been established to help small business owners living in federally designated low- and moderate-income areas.
  

While it’s unclear exactly how the PPP changes will affect small businesses, the administration believes they could go a considerable way in improving access to much-needed funds. Other resources, including better messaging about the PPP program and easier access to lenders for companies to ask questions about PPP are also being implemented to aid small businesses.

As always, if you have questions about the new PPP changes or would like to take advantage of the exclusive two-week application period, be sure to consult your Perlson LLP professional at 516-541-0022 to help you navigate this year’s tax landscape and develop a strategy that best suits your unique situation.