A reminder on new PPP changes

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President Biden recently announced changes to the Paycheck Protection Program, including a new 14-day window where loan applications must be exclusive to small businesses and nonprofits with fewer than 20 employees.

As a result of this change, the PPP is now giving lenders more time to work directly with small businesses before the program ends on March 31, many of which are owned by women and members of other minority groups who have received a disproportionate share of the relief money.

With this announcement, the Small Business Administration will continue to process applications from larger businesses, so long as they were submitted before Feb. 24, 2021. To date, approximately $140 billion, or only about half of the program’s $284 billion allocated, has been spent through Feb. 21, according to the SBA.

In addition to exclusively serving small businesses for two weeks, the SBA announced several other changes that will impact businesses throughout the country. These new rules are meant to assist the latest round of PPP funds reach small businesses with low to moderate income who have not received PPP relief funds. Under the new rules, the SBA will now:

• Allow the following applicant groups to receive more financial support through revisions to the PPP’s funding formula: sole proprietors, independent contractors, and self-employed individuals.
• Help small business owners with prior non-fraud felony convictions, or with student loan debt delinquency, by eliminating several exclusionary restrictions on PPP access for these owners.
• Confirm access for noncitizen small business owners who are lawful U.S. residents.

These changes are a positive sign for small businesses that have been underrepresented and have had significant hurdles to jump over when navigating the PPP. As we near the end of the program, it is essential business owners interested in receiving a first- or second-draw PPP loan obtain the necessary information and apply for the loan as quickly as possible.

Looking to the future, the Biden administration is on the verge of achieving its $1.9 trillion stimulus plan, which the president says will include $50 billion to help the hardest hit small businesses after the PPP has expired. As of now, the Biden Administration is not asking to extend the program.

Kyle Harris is a senior vice president, wealth management, The Harris Gibson Group, UBS Wealth Management USA. He can be reached at [email protected].