The Biden Administration recently announced substantial changes to the Paycheck Protection Program (PPP), which provides forgivable loans to businesses struggling during the COVID-19 pandemic. More than $660 billion in PPP loans have been approved since April 2020, and many companies still have the opportunity to apply for loans until March 31, 2021.

During the February 25 Small Business Update, Jeanette Mulvey, Content Director at CO—, spoke with White House National Economic Council Deputy Director Bharat Ramamurti and U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley about the new changes. Bradley also answered tough questions about PPP and other coronavirus business aid options that audience members posed.

Two-week exclusive window for smallest businesses open now

Starting February 24 and ending March 9, there will be a two-week exclusivity period for businesses with fewer than 20 employees to apply for first- and second-draw PPP loans. This move has been designed to give the smallest businesses, many of which are minority- and women-owned, a better opportunity to get an application approved.

“98% of businesses in this country have fewer than 20 employees,” Ramamurti said. “And what we've seen in previous rounds of small business relief since this pandemic started is that getting to those very small businesses has been hard. We all know that some of these small businesses don't necessarily have lawyers and accountants on staff. … Our hope is that with a concerted effort from lenders and the administration generally, we can get the word out to these businesses that there's an opportunity to apply for PPP [and] that we can get you relief quickly.”

Notably, businesses with more than 20 employees that have not already applied will still have the chance to submit a PPP application between March 9 and 31, 2021.

New ways to help sole proprietors, independent contractor and the self-employed

Another major incoming change to PPP will be how large of loans sole proprietors are eligible to receive. The SBA will soon be issuing a change on calculating the maximum amount of the loan to be based on gross income (line 7) on their Schedule C forms instead of net income (line 31). Using the gross income amount could greatly increase the PPP loan amount for which they qualify.

“The way PPP worked previously for sole proprietors was that some were ineligible altogether, and some were only eligible for a very small amount of relief because of how it was calculated,” Ramamurti said.

Bradley said he anticipates changes that will impact small proprietors will go into effect Monday, March 1, so anyone eligible should look for the official announcement soon. The SBA may also announce if and how sole proprietors can reapply for loans or request term changes because of the new formula.

Our hope is that with a concerted effort from lenders and the administration generally, we can get the word out to these businesses that there's an opportunity to apply for PPP [and] that we can get you relief quickly.

Bharat Ramamurti, White House National Economic Council Deputy Director

Increasing PPP access to non-citizens and those with felonies and student loan delinquencies

The SBA will also soon improve or expand access to PPP loans to those previously unable to use the program. These include legal immigrant entrepreneurs who pay taxes but are not U.S. citizens; those in delinquency on student loan payments; and those who have a non-fraud felony but have already served their time.

“We took several steps that are intended to get rid of restrictions that are unnecessary and blocking relief from people who deserved it,” Ramamurti said.

Changes could help minority-owned businesses

While the new PPP rules don’t just help minority-owned businesses, the data suggests that more minority-owned companies could benefit from the changes simply because many of them are small employers.

“Based on the data about minority-owned businesses, they tend to be self-employed or smaller employers,” Bradley said. “Focusing the next two weeks on employers with fewer than 20 employees and making the change for the self-employed, those are two things that are going to help minority businesses.”

Apply as early as you can for PPP aid

Bradley stressed that any business that is eligible for PPP should be working to get their application in as soon as possible, in case money runs out or the system is overwhelmed by a rush of last-minute applicants at the end of March.

“If you have fewer than 20 employees, take advantage of this window between now and March 10,” Bradley said. “If you have more than 20 employees and you want to take advantage of a first- or second-draw PPP, get ready to go. … I don't think you want to be in a situation in which you’re waiting until the last week of the month and run the risk that they might run out.”

Shuttered venue grants going live soon

Bradley noted that the upcoming Shuttered Venue Operators (SVO) grant program — which will distribute $15 billion to live venue operators, including eligible movie theaters, concert spaces, museums and performing arts organizations — is still expected to launch shortly.

“The SBA is still setting up this program,” Bradley said. “They're not currently accepting applications, but they are routinely updating their website. And we're hoping that any day now that will start.”

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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Need help planning your financials?

Join us Thursday, March 4, at 12pm ET for CO— Roadmap: Planning Your Financial Future, an interactive discussion focused on giving you the information and insight you need to ensure a strong financial future for your business, even during the tough times.



Published February 25, 2021