This past week the Biden administration rolled out new changes to the guidelines surrounding Small Business Administration (SBA) forgiveable loans.
These changes provide better chances for small firms (with less than 20 employees), independent contractors and sole proprietors to be approved for these forgivable loans. With almost two-thirds of the small and minority owned businesses who previously applied being denied… this is a BIG deal!
They are now implementing a new formula that uses gross income in place of payroll costs (a larger number than the net income that was previously used instead), which means these types of business structures will get more money when approved for a PPP loan.
ALSO the new changes eliminated restrictions surrounding those with student loan debt or non-fraudulent felony charges, as well as permitting some non-citizen business owners to apply.
So what now? What do I do?
Over the span of the next week or so, the SBA will only be accepting applications for forgivable loans for ONLY small businesses with less than 20 employees.
You can apply for either your first or second round draw of PPP loans.
If you are able to apply for your first round now, then do so because you may be able to apply for second round drawing of PPP before the deadline approaches.
Just know that if you are applying for your second round of forgivable loans, that ALL funds from the first round must be spent, and that at least one quarter of 2020 can be shown documented of a 25% revenue drop.
Apply for the PPP sooner, rather than later.
Be prepared to provide a copy of your Schedule C.
Lastly, remember that March 31, 2021 is the deadline.
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