PPP Update #22 – White House Announces Adjustments to PPP Program

Posted on Tue, Feb 23, 2021 ©2021 Drucker & Scaccetti


As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: #1, #2#3#4#5#6#7,#8,#9,#10,#11,#12,#13, #14, #15#16#17, #18,

#19, #20, #21, #22, #23


As the Paycheck Protection Program (PPP) saga continues, today we have a brief update on recent developments. Yesterday, the White House provided a fact sheet outlining proposed changes to the Paycheck Protection Program. While there are no specifics cited within the fact sheet, it does “explain” some of the processing delays associated with this round of PPP. The fact sheet also provides some insight into changes to expect going forward.

Click here to read the Whitehouse fact sheet.


The highlights include:


  1. Beginning Wednesday, February 24, 2021 through Tuesday, March 9, 2021, financial institutions, and the Small Business Administration (SBA) will prioritize PPP borrowing applications for businesses of fewer than 20 employees. The intent is to have all parties focus on serving the smallest of businesses. Early commentary indicates the SBA will continue to process applications already in process but will not begin processing new applications for businesses with 20 or more employees until March 10. If you are worried about missing out on this round of PPP, you may take comfort in knowing less than half of the original $284 billion allocated for this program has been lent to date.


  1. There is mention in the fact sheet of changing the loan calculation for sole proprietors, independent contractors, and self-employed individuals to increase their loan size, but no specifics are provided. Many believe this change would include a focus on gross receipts vs. net income on a sole proprietors Schedule C for determining new loan amounts.


  1. The administration is seeking to make additional small businesses eligible to borrow by removing restrictions around owners of 20% or more of the small business who have prior non-fraud felony convictions or federal student loan delinquencies. Currently, if a business has a 20% or more owner with either issue, the business is automatically excluded from borrowing.


  1. Many borrowers during this round of the PPP have complained about delays in processing the applications and new questions and requests from their lenders. The fact sheet provides insight into why this is the case: all loans are now contingent on passing SBA fraud checks, run through the Treasury’s Do Not Pay database, and cross-checked against public records to ensure compliance with the PPP program’s requirements. The SBA is also conducting some up-front manual reviews for the largest loans.


We will continue providing PPP updates when significant relevant information becomes available.  If you have questions about how to navigate the PPP Forgiveness Application process, or how other CARES Act incentives may apply to your business, please call on us.  You can stay up to date on PPP guidance and tax issues relating to the coronavirus at our COVID-19 Tax Resource Center.

Topics: small business, Paycheck Protection Program, Small Business Administration, PPP Loan, SBA, ppp, PPP guidance, CARES

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