Restrictions related to the COVID-19 public health emergency hit businesses hard in 2020. As companies struggled to keep employees on their payroll, the Trump administration offered financial support through various loan programs. For example, the Payroll Protection Program (PPP) provided small, potentially forgivable loans to small business owners. However, some businesses found it difficult or impossible to qualify. PPP changes going into effect this week will affect eligibility and open the program to a number of specific groups.
PPP Changes Going into Effect on February 25, 2021
Starting on Wednesday, February 25, applicants must be:
- Companies with 20 or fewer employees,
- Located in specific income areas.
The changes are intended to target very small businesses, especially sole proprietors, and self-employed people. Based on the proposed PPP changes, the Small Business Administration (SBA) plans to “set aside $1 billion for businesses without employees in low- and moderate-income areas, mostly owned by women and people of color.”
Another PPP change involves how loans are calculated. Small business owners typically include as many business deductions as possible to lower their tax burden, but their decreased net income affected their ability to get PPP funds. Now, the SBA will use gross income when determining loan eligibility. This change should increase the number of businesses that qualify while also increasing the amount of the loans. Unfortunately, companies that have already received PPP funds will not be able to reapply for the increased loan amount at this time.
Removing Restrictions and Limitations
The PPP changes also open the loan program to:
- Business owners who are legal US residents but not citizens.
- People with delinquent student loans.
At this time, convicted felons are still prohibited from applying. However, new rules are being considered that allow them to apply unless they are currently incarcerated.
Will PPP Changes Make it Easier for You to Qualify?
As a result of the proposed PPP changes, struggling businesses can receive funds to help them carry on.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.