Across the country, small businesses create two-thirds of new jobs and employ nearly half of America’s workers, yet nearly a year into the COVID-19 pandemic, many are still struggling to survive. If you feel like there are constant updates surrounding the Paycheck Protection Program, you’re not alone. This week, the Biden administration announced several PPP changes in an effort to reach minority-owned and very small businesses that may have previously missed out on accessing loans. With the March 31st PPP application closing date looming, your business may benefit from some of the updates. Below is a summary of the main updates to keep in mind.
Bigger Focus on Small Business
Did you know that 98% of small businesses have fewer than 20 employees? Maybe this describes your business or a local vendor you work closely with. Starting Wednesday of this week, small businesses with fewer than 20 employees will have a two-week exclusive window to apply for the funding. Bigger businesses will be blocked during that time period. The 14-day exclusive application period will allow lenders to focus on serving these smallest businesses.
Other Eligibility Changes
Starting in March, self-employed, sole proprietors and independent contractors will now qualify for more money. They were previously excluded altogether or received as little as $1 because the loan amounts were calculated based on the number of employees. The loan program will also open up to small business owners with non-fraud-related felonies as long as the applicant or owner is not incarcerated at the time of the application. With millions of Americans delinquent on student loans, those struggling to pay off student loan debt can now apply to the program, too. Working with the Departments of the Treasury and Education, the SBA will remove the student loan delinquency restriction to broaden access to the PPP. Some non-citizen residents, such as Green Card holders or those in the country on visas were previously excluded but can also now apply by using their Individual Taxpayer Identification Numbers (ITINs) for relief.
The PPP application is currently being revamped and the SBA website is being updated to help more applicants find relief option resources and complete applications. To improve access to capital for small businesses, the SBA is also in the process of launching a new initiative to deepen its relationships with lenders. This model will increase the opportunity for lenders to provide recommendations and ask questions about the PPP and drive the resolution of open questions and concerns in a more streamlined way. The latest PPP, which began on January 11 and runs through the end of March, has already paid out $133.5 billion in loans — about half of the $284 billion allocated by Congress — with an average loan under $74,000.
Do you have questions about your construction company and the new changes we mentioned above? To learn if previous restrictions were preventing you from accessing the funds you need, contact our team today before time runs out. If you want streamlined construction accounting in Mid-Hudson Valley, NY, RBT has the essential services you’re looking for.