As you may have heard, on Monday, February 22, 2021 the White House announced some changes to the current Payroll Protection Program (PPP2) with the intent of further helping small businesses and sole proprietors. Although the program is currently open to all eligible businesses, beginning tomorrow, February 24, only business with 20 or fewer employees will be able to apply for funding. This period is expected to last two weeks and is intended to allow lenders the opportunity to focus on processing loans for these small businesses.
Furthermore, there is a separate provision for $1 billion in funds to be targeted to sole proprietors and independent contractors. Although previously eligible for PPP assistance, the calculations for loan amounts were restrictive since most of these businesses do not have employees. This new provision is intended to allow sole proprietors and independent contractors an opportunity to apply for larger amounts than before; however, the specifics on these changes are not yet available.
We will be monitoring the developments in the PPP and will continue to keep you apprised of important developments as they happen.
Jessica A. Distel, CPA, MBA
Director of Tax and Business Services