At the direction of the White House and effective on Wednesday, February 24, 2021, the SBA will establish a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees. This will give lenders and community partners more time to work with the smallest businesses to submit their applications, while also ensuring that larger PPP-eligible businesses will still have plenty of time to apply for, and receive support before the program expires on March 31, 2021. In addition, these small businesses will be able to base their loans on gross income. Although details are vague, sources have indicated loans are available based upon 2.5 times the average 2019 monthly gross income, rather than net profit.
In addition, the SBA will:
A critical goal from Congress for the latest round of PPP loans was to reach small and low-and moderate-income (LMI) businesses who have not received the needed relief a forgivable PPP loan provides. Congress provided $15 billion for small and LMI first draw borrowers. With existing policies, the current round has only deployed $2.4B to small LMI borrowers, in part because a disproportionate amount of funding in both wealthy and LMI areas is going to firms with 20 or more employees. The less than 20 exclusivity period, combined with the changes to expand access for sole proprietors, allowing applicants with ITINs, and permitting those with delinquent student loan debt to participate, will help achieve Congressional goals.
Please contact this office at (616) 957-2055 if you have any questions.