If you own a business with 20 or fewer employees and planned to apply for the third round of Paycheck Protection Program funding, take action ASAP. There is new help available for small businesses like yours.
Here’s what you need to know about the Biden-Harris Administration’s reforms.
There is a 14-day period
(that started February 24) where only businesses with fewer than 20 employees can apply for PPP relief: After the 14 day waiting period, all qualified businesses can apply until March 31, 2021. However, at this moment in time and until March 10, 2021, small businesses with 20 or fewer employees have a better chance of obtaining the lion’s share of funds.
It may be true that a smaller business struggles more than larger businesses to collect the necessary paperwork and secure relief from a lender. This opportunity is your green light to compile the necessary paperwork and have lenders focus on your needs.
In addition to the above moratorium, there are few more changes to the program, including:
Help for sole proprietors, independent contractors, and self-employed:
Many had been excluded from the program because of how PPP loans are calculated. To address this problem, the loan calculation formulas were revised for these applicants. It offers more relief and sets aside a $1 billion fund for businesses in this category. The change will help independent entrepreneurs like home repair contractors, beauticians, and small independent retailers.
Help for small business owners who are delinquent on their federal student loans:
The changes eliminate an exclusionary restriction that prevented small business owners who are delinquent on their federal student loans from obtaining PPP relief. Working with the Departments of the Treasury and Education, the SBA will remove the student loan delinquency restriction to broaden access to the PPP.
Help for non-citizen but lawful resident small business owners:
The changes ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Numbers (ITINs) to apply for relief.
Small businesses continue to face significant challenges amid the COVID-19 pandemic, including less demand, heightened expenses, and limited credit availability. I hope this PPP news is good for your small business.
In the meantime, I recognize that many business owners need guidance on how to identify, apply for and utilize the best possible resources. At Brigade, our goal is to help as many as possible with our Small Business Support and Resource Library, a collection of free information we hope will point you in the right direction.