Biden administration implements changes in the Paycheck Protection Program
The U.S. Small Business Administration is making a number of temporary and permanent changes to the Paycheck Protection Program (PPP) to increase funding received by smaller businesses, including a 14-day period during which only businesses and nonprofits with fewer than 20 employees will be able to submit applications.
The program’s exclusive period for smaller businesses begins Feb. 24.
“Millions of Main Street, mom-and-pop small businesses — especially minority-owned small businesses here in Puerto Rico — are struggling to make ends meet. These are critical components of our communities,” said Josué E. Rivera, the SBA’s district director for Puerto Rico and the US Virgin Islands’ District Office.
“The SBA is prioritizing hard-hit mom-and-pop shops, the smallest of the small businesses, throughout Puerto Rico and USVI, in the Paycheck Protection Program so that they can rehire and retain workers, safely reopen, and deliver the essential goods and services our communities depend on,” added Rivera.
The SBA will still process all applications already submitted by lenders before the start of the exclusivity period. Once the exclusive 14-day period ends, lenders will be able to submit PPP loan applications for all eligible businesses and nonprofits again through March 31, 2021, when the program ends.
Other announced changes to the program that will be implemented by the SBA in the first week of March:
- Allow sole proprietors, independent contractors, and self-employed individuals to receive more financial support by revising the PPP’s funding formula for these categories of applicants;
- Eliminate an exclusionary restriction on PPP access for small business owners with prior non-fraud felony convictions, consistent with a bipartisan congressional proposal;
- Eliminate federal student loan debt delinquency and default as disqualifiers to participating in the PPP; and
- Ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Number (ITIN) to apply for the PPP.
The SBA also announced that it has approved 9,234 PPP loans for businesses and nonprofits in Puerto Rico. This represents an increase of more than 26% from the previously approved 7,301 PPP loans in the last report. Approved funding has increased by over 36% from $283.8 million to $388.0 million.
At the national level, the top industries receiving PPP approvals are accommodation & food service with 18% of all PPP loans, followed by construction (13%), professional, scientific & technical services (11%), health & social assistance (10%) and manufacturing (10%).
According to the SBA, approximately 32% of all loans have completed the forgiveness process, totaling around 29% of total 2020 PPP volume. Some 1.7 million loans have been forgiven so far.
“The SBA’s actions will help lay the foundation for a robust and equitable recovery for small businesses across the country. They help pave the way for a more inclusive economy, racial and gender equity and fairness for rural and other underserved geographical areas in meaningful ways,” Rivera said.