P3 Loan Changes Aim To Help Sole Proprietors And Independent Contractors
The US Small Business Administration has announced some changes to its paycheck protection program to help sole proprietors and independent contractors.
Announced on Monday, February 22, the changes include:
- Establish an exclusive 14-day PPP loan application period for businesses and nonprofits with less than 20 employees.
- Allow sole proprietors, independent contractors and self-employed workers to receive more financial support by revising the P3 funding formula for these categories of applicants.
- Remove an exclusionary restriction on PPP access for small business owners who have previously been convicted of non-fraudulent crimes, in accordance with a bipartisan congressional proposal.
- Eliminate P3 access restrictions for small business owners who have had difficulty making federal student loan payments by eliminating delinquencies and defaults on federal student loans as disqualifications to participate in P3.
- Ensure access to non-citizen small business owners who are legal residents of the United States by specifying that they can use the Individual Tax Identification Number (ITIN) to apply for the PPP.
“The significant policy changes we are announcing further ensure inclusiveness and integrity by increasing access and much-needed support to the main street businesses that anchor our neighborhoods and help families build wealth,” said SBA senior advisor Michael Roth said in a press release.
White House Fact Sheet
According to a White House fact sheet during the changes to the SBA, many sole proprietors and independent contractors had been “structurally excluded” from the P3 because of the way loans were calculated. Even when these companies were approved for a loan, the White House said there were cases of companies approved for as little as $ 1.
As part of the changes, the loan calculation formula will be revised so that sole proprietors and independent contractors are offered more relief. In addition, $ 1 billion will be set aside for businesses without employees located in low- and modest-income areas.
“We believe these changes to the Paycheck Protection Program can help owner-operators finally access loans, and we appreciate the fact that they are being made,” said Bryce Mongeon, Director of Legislative Affairs, OOIDA. . “Over the past year, we have informed Congress and the SBA about the problems OOIDA members have in accessing loans due to the strict way in which maximum loan amounts are calculated. While these changes can be beneficial, the program will soon end on March 31. We will be closely monitoring how quickly the changes are implemented and whether relief is actually reaching the truckers.
When do PPP loan changes begin?
The 14-day exclusivity period will begin at 9 a.m. EST on Wednesday, February 24, while the other four changes will be implemented by the first week of March.
The SBA said it is working on the schedule changes and will release details throughout the week.
“These actions will help lay the groundwork for a strong and fair recovery for small businesses across the country,” the SBA press release said. “Small businesses employ almost half of the US workforce. They create two out of three net new jobs in the private sector and reinvest 68% of income to build and support communities.
Borrowers can apply for the Paycheck Protection Program by downloading the PPP First Draw loan application or Second PPP loan application and working with a participating PPP lender through the SBA Lender Matching Tool. LL