February 23, 2021 - The Cares Act established the Paycheck Protection Program which permitted the SBA to provide loans to qualified businesses impacted by the coronavirus (COVID-19) pandemic.

On Monday, February 22, President Biden announced several reforms to ensure that the smallest of businesses receive much needed relief.

• For a two week period, beginning on February 24, 2021, the SBA will only accept applications for PPP loans for businesses with fewer than 20 employees. 
• The loan calculation formula will be revised to provide greater access to sole proprietors, independent contractors, and self-employed individuals.
• Small business owners with prior non-fraud felony convictions will not be restricted from receiving a PPP loan.
• An exclusionary restriction is eliminated that prevents small business owners who are delinquent on their federal student loans from participating in the Paycheck Protection Program.
• The SBA has been directed to issue guidance clarifying that non-citizen small business owners who are lawful U.S. residents may use an Individual Taxpayer Identification Number (ITIN) when applying for a PPP loan.

With the implementation of these changes, the SBA will strengthen its relationships with lender partners to advance equity goals, deliver funding efficiently, and prevent fraud, waste, and abuse.

If you have any questions or if you would like to discuss any of these changes in detail, please contact your tax professional at Dermody, Burke & Brown CPAs. 

The information reflected in this article was current at the time of publication.  This information will not be modified or updated for any subsequent tax law changes, if any.