In order to truly help small businesses, Biden’s administration has decided to make some changes to how they grant PPP loans.
During the first rounds, some businesses that were not really “small” were able to access this aid and stay afloat during the brunt of the pandemic, but smaller businesses, like mom and pop shops, were left without the financial help they desperately needed.
But Biden is trying to change that, and in order to achieve it, he made the following changes:
1. ITIN eligibility
This one got us pretty excited!
In the past, only SSN holders were able to apply for a PPP loan, but now you can apply if you have an ITIN!
The only condition is that you need to be a lawful US resident: a Green Card holder or here on a visa.
This opens the doors for so many businesses!
2. Help for smaller businesses
But now, the SBA will only process applications from those businesses that only have 20 employees or less for 2 weeks (starting Wednesday, Feb 24). This will allow truly small businesses to get financial aid.
Officially, the SBA considers a small business those companies with less than 500 employees!
3. How to calculate loan size
The formula to help calculate how much a business can get with a PPP loan I going to be modified. But only for the following types of businesses:
- independent contractor
- sole proprietors
How will the formula change? Net income will no longer be used as a base, not the important number is total sales (up to 100k).
What if you already submitted your application?
You can go to the bank where you applied and apply to cover the gap.
4. Felon eligibility
During the first rounds, felons would simply not be approved for a PPP, but now they can!
The only ones that are still excluded are those with a fraud felony.
5. Student loan eligibility
Fortunately, if you have an outstanding student loan, now you can apply and be approved for a PPP loan, even if the loan of your debt is “delinquent”.
What do you think of these changes?