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.
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