The Biden Administration has created an exclusive 14-day period starting Wednesday, February 24, 2021 for small businesses with less than 20 employees to apply for the PPP 2.0 loan and changed how the SBA will calculate forgivable loans for sole proprietors and other small businesses without any employees.
The updated formula — which will likely lead to larger loan amounts for non-employer firms, including sole proprietors and independent contractors — have now been finalized. Small businesses are encouraged to apply as soon as possible. To learn more about the updates, the SBA will be providing free live webinars and pre-recorded webinars that you can find links to here.
The administration will also eliminate the following restrictions:
· Preventing business owners with prior non-fraud felony convictions from obtaining a PPP loan.
· Preventing business owners who are delinquent on federal student loan payments from securing a PPP loan.
· Allow non-citizen business owners who are lawful U.S. residents to use individual taxpayer identification numbers (ITINs) to apply for relief.
PPP 2.0: What You Need To Know:
· To qualify, businesses must have spent all of their first loan, have less than 300 employees, and prove that they lost 25% or more of revenue in any quarter in 2020, either on a quarterly or annual basis.
· Businesses will generally need to have their 2019 tax return on hand as well as profit and loss records to show that they’ve had at least one quarter where revenue fell 25% or more.
· These second loans will be made on a similar recommendation to the first round of PPP – 2.5 times payroll costs – and will also be capped at $2 million.
Key Notes For Small Business Owners:
· This 14-day application period, which ends March 9, 2021, was created to help the 98% of small businesses that have fewer than 20 employees.
· The targeted application window will free up lenders to focus on serving businesses with fewer than 20 employees.
Click here for the SBA's Small Business Guidance & Loan Resources
Click here to download your PPP (Paycheck Protection Program) 2.0 loan application form