The Biden Administration announced several changes to the SBA Paycheck Protection Program (PPP), in-line with its earlier commitment to ensure that the program reaches the smallest businesses and those in under-served communities. The biggest change to the program is that beginning Wednesday, February 24, for 14 days applications will only be accepted from businesses with fewer than 20 employees; after the end of that period, applications will once again be accepted for all eligible businesses. In addition, the SBA will update the loan calculations for sole proprietors, independent contractors, and the self-employed, reflecting data showing the previous calculations resulted in the program being less beneficial for that group than businesses with employees.
The SBA is also adding new fraud and waste prevention measures, with new applicants needing to pass SBA fraud checks, the Treasury’s “Do Not Pay” database, and a public records review. Large loans will automatically be manually reviewed, and the SBA will conduct reviews of a random sampling of others.
To improve the application process and provide better access to information about the loans, the SBA’s website will be overhauled to make it easier for businesses to find the correct applications and understand the process. Additionally, the Administration will be reaching out to small businesses and industry stakeholders to get feedback on PPP loans, including the application and forgiveness processes and the overall usefulness of the program during the pandemic.
As more details about these changes are released, NAR will provide updated information for its members and their clients. The PPP was reauthorized by the December 2020 “Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act,” which appropriated an additional $284.45 billion to the program and extended the application period through March 31, 2021.