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Self-employed and job workers who were waiting for new rules that would mean larger forgivable loans through the Pay Check Protection Program can now move forward with their applications.
As of Friday, the Small Business Administration is ready to accept and process updated PPP requests from individual homeowners looking to take advantage of a new loan calculation, the agency confirmed.
This means that individual homeowners can finally send their requests to creditors, who can send them to the SBA to be processed according to the new loan calculation guidelines.
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The changes come after the Biden administration in late February announced updates to PPP, including the revised loan calculation for individual homeowners, as well as new eligibility rules for some non-citizens, those with certain criminal backgrounds and people who had defaulted or were in default. defaulted on student loan debt.
In addition, management announced a 14-day priority window for companies with fewer than 20 employees to apply for PPP. The period started on February 24 and will end on March 9.
While the focus of the priority period was to give smaller companies, which are disproportionately owned by women and minorities, an advantage in receiving funds, the timing of the new loan calculation rule has created confusion for some. The SBA did not release guidance on the new calculation to creditors until March 3 and was not ready to process the updated applications on its system until Friday.
What to know before signing up
Now that the SBA is ready to accept and process requests, small businesses should be able to apply for PPP and be subject to new loan calculations.
To be sure, some lenders may still be working to load new applications into their systems, so business owners must confirm that they have the correct forms to apply.
Up-to-date PPP applications for self-employed workers and individual owners who submit Form 1040, Annex C of the IRS, now request the total gross revenue amount, found on line 7 of the tax form. Previously, Schedule C filers applying for PPP loans were asked to provide SBA with their net profit, line 31 of the form.
Those who apply for a first draw PPP loan must use Form 2483-C and those who apply for a second draw loan must use Form 2483-SD-C, which includes the new calculation information.
The priority application window
For small businesses that are subject to the new rule and want to take advantage of the priority application period, time is running out. The window will close at 5 pm Eastern Time on March 9, when creditors will be able to process applications for all sizes of small businesses.
Still, individual homeowners will be able to apply and see loans processed by lenders after the priority window closes. The deadline for general programming is currently March 31, unless extended by Congress.
In addition, creditors say they do not think the program will run out of money before the March deadline. This year, until February 28, the SBA approved 2.2 million loans totaling more than $ 156 billion, just over half of the $ 284 billion that the program had when it reopened in January.
“Given the pace with which the funds went, it does not appear that by the March 31 deadline they will all be used,” said Alex Prombaum, president of Liberty SBF, a non-banking institution. “The priority window may expire, but that does not mean that people will be left out.”
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