President Biden Revises PPP2

Updated: Mar 4

President Biden announced today two important changes to the PPP2 program that may impact your ability to obtain a PPP2 loan within the coming weeks.


Link to White House Press Release


Application Pause for “Larger Employers”


Beginning on Wednesday, February 24, 2021, and continuing for a 14-day period until Tuesday, March 9, 2021, the Small Business Administration (SBA) will only accept/process loan applications for businesses with fewer than 20 employees. This window for smaller businesses has been established to ensure lenders are provided sufficient time in handling applications for such businesses to ensure access to funding is made available.


As of Sunday, February 21, 2021, approximately $140.3 billion of the $284.0 billion appropriated for the PPP2 program has been claimed. Nearly, 2 million applications have been filed, with funding averaging $73,114 per application. As a reminder, participating lenders will need to submit an application to the SBA by March 31, 2021. Therefore, those interested in obtaining a PPP2 loan will need to contact a participating lender prior to March 31, 2021 to ensure sufficient time is provided to the lender to perform the necessary review of the application before they are able to submit your PPP2 application to the SBA.


Changes to PPP2 Application


President Biden announced revisions being made to the PPP2 calculation formula to allow independent contractors, self-employed individuals, and sole proprietors to have an improved opportunity in obtaining a PPP2 loan. While the White House has indicated such borrowers are receiving smaller funding amounts from the PPP, it is unclear at this point what formula changes will be made to provide more aid. While these details are forthcoming, President Biden has indicated that $1 billion is being set aside for such independent contractors, self-employed individuals, and sole proprietors that do not have employees AND are located in low- and moderate-income areas.


Additionally, President Biden plans to eliminate provisions that prohibit (1) small business owners with prior felony convictions and (2) small business owners who are delinquent on their federal student loans from obtaining PPP funding.


Employee Retention Tax Credit (ERTC) Update


We are still awaiting IRS guidance concerning the ability for businesses to claim the ERTC for payroll on a filed PPP forgiveness application that (1) is in excess of the PPP loan and/or (2) could have been


offset by non-payroll costs paid and/or incurred during the covered period but not claimed on the PPP forgiveness application filed. We do not believe that the SBA will accept amended PPP forgiveness applications to the extent such situations exist.


Additionally, we are still awaiting IRS guidance with regards to the process for amending Form 941 to claim such credits. Legislatively, Congress indicated that the full 2020 ERTC available to a business could be claimed on the Q4 Form 941 regardless of which quarter the payroll occurred. However, as the deadline for the Q4 Form 941 has passed, the IRS is expected to issue guidance on the process in claiming the 2020 ERTC; either claiming the full credit on an amended Q4 Form 941 or amending each respective quarter’s Form 941 for the payroll paid during that quarter.


To the extent a credit was claimed, or expected to be claimed, such amounts received back from the IRS will reduce your 2020 payroll tax expense. Therefore, those businesses who are expecting to file their tax return prior to filing their amended Form 941(s) may need to take this expected credit into account when determining 2020 taxable income.


While ERTC eligibility is very facts- and circumstances-based, we are finding those companies that have been eligible within 2020, the amount of the credit ranges from a few-thousand-dollars to amounts in excess of their PPP loan. Therefore, we recommend a quick conversation with us to help determine your company’s eligibility for 2020 and/or 2021.


PPP1 Loan Forgiveness Statistics


As of Sunday, February 21, 2021, the SBA published the following PPP1 forgiveness statistics:


Forgiveness Applications Processed 1,700,000 $151,700,000,000

(with letters of determination)

Under SBA Review 187,000 $76,900,000,000

Applications Outstanding 3,300,000 $292,100,000,000

Not Forgiven - $450,000,000


To the extent, you have not filed our PPP1 forgiveness applications, one of our experienced PPP professionals will be happy to assist you with that process. While the PPP forgiveness process for loans less than $150,000 has become easier with the ability to file Form 3508-S, the Simplified PPP Forgiveness Application, borrowers are still statutorily required to be able to provide supporting documentation and calculations to the SBA upon request. We can assist you with the preparation or review of these calculations to ensure compliance with the SBA’s requirements.


At Cassady Schiller, we are prepared to help you understand how these changes can apply to your specific situation. Accordingly, please reach out to us to see how we can help you take full advantage of these programs for either 2020 or 2021.



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4555 Lake Forest Drive, Suite 400

Cincinnati, OH 45242

(513) 483-6699 /

(800) 378-8606

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