Changes have been announced by the White House and SBA intended to help small businesses, including:
- Institute a 14-day period, starting Wednesday, February 24, 2021, during which only businesses with fewer than 20 employees can apply for relief through the Program.
- Help sole proprietors, independent contractors, and self-employed individuals receive more financial support.
- Eliminate an exclusionary restriction that prevents small business owners with prior non-fraud felony convictions from obtaining relief through the Paycheck Protection Program.
- Eliminate an exclusionary restriction that prevents small business owners who are delinquent on their federal student loans from obtaining relief through the Paycheck Protection Program.
- 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.
The full White House fact sheet is available here.
For the two-week period starting Wednesday, February 24, 2021, only businesses with fewer than 20 employees will be able to apply for Paycheck Protection Program (PPP) loans.
It has been announced that they will revise the loan formula for self-employed individuals to provide larger loans to certain borrowers. While the details have not been announced, it has been reported that Schedule C “owner payroll” will be based upon gross receipts, instead of net income. This will benefit individuals with less than $100,000 of Schedule C net income who apply for a PPP loan after the details of the formula change occur. If this change would benefit you, we recommend holding off on applying for a PPP loan until the SBA makes this change official.
If you have any questions, please contact your Perkins advisor.