White House announces PPP reforms targeting smallest businesses

The Biden administration announced several Paycheck Protection Program reforms to target the program to the smallest businesses.
 
The updates include:

• A 14-day period, starting Wednesday, during which only businesses with fewer than 20 employees can apply for PPP relief. During this period, however, applications already in the pipeline or requiring error resolution will continue to be processed.
• Revising the loan calculation formula for sole proprietors, independent contractors, and self-employed individuals to use gross income instead of net income, as advocated by ICBA. Additional details are expected on whether this will be limited by number of employees or otherwise. Further, $1 billion will be set aside for PPP loans to businesses in this category without employees located in low- and moderate-income (LMI) areas.
• Eliminating restrictions preventing small-business owners delinquent on their federal student loans or with prior non-fraud felony convictions from qualifying for the PPP.
• Ensuring access for non-citizen small-business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Numbers to apply for relief.

The administration also said it has revised the PPP loan applications to encourage self-reporting of demographic data, and it will conduct stakeholder outreach on PPP challenges. The SBA also will launch an initiative to enhance lender engagement with opportunities for lenders to provide recommendations and ask questions about the PPP and obtain resolution of open questions and concerns in a more streamlined way.
 
Additional PPP information and resources are available on the SBA and Treasury sites and ICBA's PPP and EIP News page.