Biden-Harris Administration Updates Paycheck Protection Program

White House
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On Tuesday, the Biden-Harris Administration made a series of changes to the Paycheck Protection Program (PPP). The reforms, according to a statement from the White House, are intended to further target the PPP to the smallest businesses and those that have been left behind in previous relief efforts. “While these efforts are no substitute for passage of the American Rescue Plan, they will extend much-needed resources to help small businesses survive, reopen, and rebuild,” the statement read.

According to the American Society of Travel Advisors (ASTA), there are two changes that travel advisors—especially independent contractors (ICs)—should be aware of. First, starting February 24 and continuing through March 9, only businesses with fewer than 20 employees will be able to apply for a PPP loan. Second, the formula used to determine the amount of a PPP loan for sole proprietors, ICs and self-employed individuals will be adjusted to provide more relief.

Here's what you need to know:

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As mentioned above, there will be a 14-day period, starting Wednesday, during which only businesses with fewer than 20 employees can apply for relief through the PPP. This allows lenders to focus on serving these smallest businesses. The Biden-Harris Administration says it will make a “sustained effort” to work with lenders and small business owners to ensure small businesses take maximum advantage of this two-week window.

According to the White House, sole proprietors, ICs and self-employed individuals make up a significant majority of all businesses. Of these businesses, those without employees are 70 percent owned by women and people of color. Additional changes aim to help these workers receive more financial aid. Previously, many were structurally excluded from the PPP or were approved for as little as $1 because of how the loans are calculated. Now, the loan calculation formula for these applicants is designed to offer more relief and sets $1 billion aside for businesses in this category located in low- and moderate-income areas.

Other modifications include:

  • Eliminating an exclusionary restriction that prevents small business owners with prior non-fraud felony convictions from obtaining relief through the PPP
  • Eliminating an exclusionary restriction that prevents small business owners who are delinquent on their federal student loans from obtaining relief through the PPP
  • Ensuring access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Numbers (ITINs) to apply for relief
  • Promoting transparency and accountability by improving the PPP loan application
  • Continuing to conduct extensive stakeholder outreach to learn more about challenges and opportunities in the implementation of current emergency relief programs
  • Enhancing the current lender engagement model

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