February 26, 2021 – Small Businesses Given Exclusive Access to PPP Loans

The Biden Administration announced the implementation of measures to provide economic relief to the smallest U.S. businesses.  Under these measures, the Small Business Administration (“SBA”) is offering exclusive access to Paycheck Protection Program (“PPP”) loans to sole proprietors and business and nonprofit entities with fewer than 20 employees for the two-week period beginning February 24, 2021 and ending March 10, 2021.

In addition, other  changes to the PPP to benefit these small business that have been made, or are anticipated to be made in the near future, include making the program available to tax residents that are not U.S. citizens, changes to the PPP loan calculation formulas, and allowing sole proprietors, self-employed individuals and independent contractors to determine their loan amounts based on gross receipts rather than net income.

During the two-week exclusivity period, the SBA will not accept new applications from borrowers with 20 or more employees.   However, the SBA will continue to process any applications that were already submitted by the February 24 starting date.  

Currently, the PPP loan program is set to expire on March 31, 2021.   Therefore, businesses and nonprofits with 20 or more employees should continue the loan application process with their lender during the exclusivity period to ensure that their application is completed and submitted before the expiration date.  After the conclusion of the exclusivity period, lenders will be able to submit PPP loan applications to the SBA for all qualifying borrowers.

For more information regarding new developments in tax law, please click here to view our Tax Alerts on the Whitley Penn website.

Whitley Penn is continually monitoring the tax and economic developments related to the coronavirus pandemic and will send out additional alerts in the future. In the interim, please contact your Whitley Penn tax advisor if you have any questions or require any additional information.