Temporary changes to PPP program, what it means for small business owners
The White House made temporary changes to the Paycheck Protection Program to reach small business owners who are struggling to make ends meet.
The changes began on Wednesday, February 24th and are in effect for two weeks.
A new report by the U.S. Small Business Association showed that small businesses actually make up about 44% of the country’s economy, creating two-thirds of new jobs.
“They are the backbone of our economy, they are part of our way, the fabric of the American dream,” U.S. Small Business Administration Public Affairs Specialist Laura Schafsnitz said. “They’re like the stitch in that quilt that keeps that American dream quilt together. So if we lose that stitching, we lose those small businesses, what do we have left.”
That is why the White House rolled out these five key changes:
- Only businesses with fewer than 20 employees can apply for the program
- Help sole proprietors, independent contractors, self-employed individuals—who make up a majority of all businesses—can get more financial support
- Eliminates the restriction on owners with prior non-fraud felony convictions
- Eliminates the restriction preventing anyone who is delinquent on federal student loans
- Ensures access for non-citizen owners, who are lawful residents, using the Individual Taxpayer Identification Numbers (ITINs) to apply
“What we found from the data that we collected during the first round of PPP and what congress looked at with the White House was that you know we’re getting the money out there, but we’re maybe not getting it to the smallest of small, small businesses,” Schafsnitz said.
To reach the very small businesses, that means only owners who have fewer than 20 employees can apply for the program.
About 98% of small business owners have fewer than 20 employees, according to data from the White House.
The definition of a small business might actually be more complex than the average person thinks.
“I think sometimes a common misnomer is that what we might perceive as being a large business isn’t a large business, just because a business employs 90% of the community and it’s a large community does not mean that business is not technically, according to size standards, not considered a small business,” Schafsnitz said.
The criteria also depends on what industry you are in. This calculator allows business owners to enter details, such as how many employees you have or your profits, to help you figure out if you do qualify as a small business.
Using this tool from the SBA allows business owners to find an SBA certified lender.
Small business owners have until 5pm EST Tuesday, March 9th, to submit an application during these temporary changes.