The latest round of Paycheck Protection Program (PPP) funding opened in January, and now, the Small Business Administration (SBA) is taking steps to prioritize lending to small businesses.
To achieve this, the administration will:
- Establish a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees to begin Feb. 24;
- 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 PPP access restrictions on small business owners who have struggled to make federal student loan payments by eliminating 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.
Improvements to the program’s implementation include:
- For businesses with fewer than ten employees, the share of funding is up nearly 60 percent.
- For businesses in rural communities, the share of funding is up nearly 30 percent.
- The share of funding distributed through Community Development Financial Institutions and Minority Depository Institutions is up more than 40 percent.
“The SBA is a frontline agency working to create an inclusive economy, focused on reaching women-owned, minority-owned, low- and moderate-income, rural, and other underserved communities in meaningful ways. While reported data illustrates we have made real strides in ensuring these funds are reaching underserved communities, we believe we can still do better,” says SBA Senior Advisor Michael Roth. “The important policy changes we are announcing further ensure inclusivity and integrity by increasing access and much-needed aid to Main Street businesses that anchor our neighborhoods and help families build wealth.”
The SBA notes small businesses employ nearly half of the American workforce; they create 2 out of 3 net new private-sector jobs; they reinvest 68 percent of revenues to build and sustain communities.
Borrowers can apply for the Paycheck Protection Program by downloading the First Draw PPP loan application or Second Draw PPP loan application and working with a participating PPP lender through the SBA Lender Match tool.