Coronavirus and Your Money

Biden Steers PPP Loans to Smallest Businesses

For two weeks, mom-and-pop businesses will move to the front of the line for Paycheck Protection Program loans.

The Biden administration has announced some tweaks to the Paycheck Protection Program (PPP) meant to boost access to the forgivable loans for mom-and-pop businesses.

The Small Business Administration will soon accept applications for PPP loans exclusively from businesses and nonprofits with fewer than 20 employees, for a period of 14 days. The SBA says that the share of the program's funding going to businesses with fewer than 10 employees is up nearly 60% when compared with the same point in the program last year. But the Biden administration wants to further target the PPP to the smallest businesses. The 14-day period will start on Wednesday, February 24, 2021, at 9:00 am.

The SBA will also allow sole proprietors, independent contractors and self-employed individuals to receive more financial support. These types of businesses, which include home repair contractors and small independent retailers, make up a significant share of all businesses. The SBA will revise the PPP's calculation formula for these applicants so that it offers more relief.

The SBA is eliminating the restriction that prevents small-business owners who are delinquent on their federal student loans from getting a PPP loan. Currently, the PPP is not available to any business with at least 20% ownership by an individual who is currently delinquent or has defaulted within the past seven years on a federal debt, including a student loan.

The agency will also eliminate the restriction that disqualifies small-business owners with prior non-fraud felony convictions from getting a PPP loan – a move with broad bipartisan support. The SBA has also clarified that small-business owners who are not U.S. citizens, but are lawful U.S. residents, may use their Individual Taxpayer Identification Number to apply for a loan. These changes will be implemented by the first week of March.

Congress provided $284 billion for the latest round of PPP loans under the coronavirus relief package passed in December. As of February 18, less than half of those funds have been used.

Most Popular

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer
Coronavirus and Your Money

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer

The IRS has an online tool that lets you track the status of your stimulus checks.
February 19, 2021
The Current Plan for $1,400 Checks
Coronavirus and Your Money

The Current Plan for $1,400 Checks

Here's what you need to know about the stimulus check plan currently being considered in Congress for President Biden's COVID-relief package.
February 18, 2021
Want More Tax-Free Retirement Income? One Man’s Whole Life Decision
life insurance

Want More Tax-Free Retirement Income? One Man’s Whole Life Decision

Whole life insurance might not be something that’s on your retirement planning radar, but for this client, here’s how it served his need to control ta…
February 23, 2021

Recommended

Small-Business Owners Can Be Divided into 2 Camps – Which Are You?
small business

Small-Business Owners Can Be Divided into 2 Camps – Which Are You?

The financial complexities of being a small-business owner are vast regardless of the “camp” they reside in. Juggling business needs with personal fin…
February 17, 2021
Tax Changes and Key Amounts for the 2020 Tax Year
tax law

Tax Changes and Key Amounts for the 2020 Tax Year

There were a lot of tax changes for the 2020 tax year. Get familiar with them now – before you file your 2020 tax return.
February 8, 2021
Retirees' Guide to Do’s and Don’ts of Business Partnerships
Making Your Money Last

Retirees' Guide to Do’s and Don’ts of Business Partnerships

Know some of the business partnership pros and cons before diving in. A business partnership agreement is a good place to start.
January 11, 2021
Social Media Policy Warning: Loose Lips Sink Ships and Can Damage Your Company’s Reputation
small business

Social Media Policy Warning: Loose Lips Sink Ships and Can Damage Your Company’s Reputation

If a member of the media calls your company, will the employee who answers the phone know how to handle things? Or will they make your company look ba…
January 7, 2021