Paycheck Protection Program to Offer Exclusive Covid-19 Loan-Application Window for Smallest Firms


In the Wall Street Journal today, Amara Omeokwe reports on the current stage of the new PPP (Paycheck Protection Program) for Small Businesses.  If you run a small business this presentation is worth the read discussing the procedures and the timeliness of the program.  Here’s the report:

WASHINGTON—President Biden on Monday announced changes to the federal government’s signature coronavirus-relief program for small businesses, in a bid to improve access for very small companies and those owned by minorities or located in underserved communities.

As part of the changes, the Small Business Administration will accept applications for the Paycheck Protection Program exclusively from companies with fewer than 20 employees for 14 days starting Wednesday, Mr. Biden said.

The changes “will make sure we look out for the mom-and-pop businesses even more than we already have,” Mr. Biden said.

The PPP, which offers forgivable loans to small businesses to help them weather the economic impacts of the coronavirus pandemicreopened in January after being closed since August. The loans are issued by lenders and backed by the SBA.

PPP applicants with fewer than 20 employees will be able to apply exclusively from 9 a.m. ET on Wednesday until 5 p.m. ET on March 9, an administration official said.

The program overall is slated to end March 31.

The exclusive window will “give lenders and community partners more time to work with these Main Street businesses that anchor our neighborhoods and help families build wealth, while also ensuring larger PPP-eligible businesses will still have plenty of time over three weeks to apply for and receive support before the program expires,” the official said.

PPP last year fell under public scrutiny as very small businesses and those without existing banking relationships initially struggled to access the program. Advocacy groups and others also raised concerns about how well the program was reaching minority and underserved communities.

The SBA under the Biden administration and the Trump administration has highlighted community lenders as key to ensuring the program reaches a range of businesses, including those without strong ties to traditional banks. Under the reopened program, community and smaller lenders issued PPP loans exclusively during the initial days, a step the SBA said it implemented to boost participation among minorities, women, veterans and underserved communities.

Mr. Biden announced other changes aimed at improving access for sole proprietors, independent contractors and self-employed workers, including how they calculate their loan amounts.

Administration officials said they had heard from applicants who were approved for loans of just $1 because the rules require them to calculate the loan amount using the net profit listed on their tax returns. These applicants will now be able to calculate their loan amount using gross income.

The SBA will also set aside $1 billion of program funding for applicants with no employees who are also located in low- and moderate-income communities, the official said.

Other planned changes include allowing broader access to the program for applicants with non-fraud felony convictions, aligning with a bipartisan proposal from Sens. James Lankford (R., Okla.), Rob Portman (R., Ohio), Ben Cardin (D., Md.), and Cory Booker (D., N.J.). The administration official said the SBA will also work with the Treasury and Education Departments so that borrowers who have recently defaulted or are delinquent on federal student-loan payments wouldn’t be blocked from receiving PPP loans.

Congress provided $284 billion for the newest round of PPP, as part of its coronavirus relief package passed in December. As of Feb. 21, less than half those funds were exhausted, according to agency data, as the SBA had approved about $140.3 billion in loans since the program’s reopening on Jan. 11.

Agency data as of Feb. 18 show about 25% of the reopened program’s loan volume has been approved to applicants in low- and moderate-income communities. About 94% of approved loans have been for amounts under $250,000, which the SBA has said is a sign the program is reaching smaller borrowers.

Meanwhile, new measures to guard against fraud have delayed processing of loan applications during the newest PPP round, lenders have said. The holdups are a result of flags the SBA placed on the files of approximately 240,000 initial PPP recipients for issues ranging from clerical errors to indications of possible wrongdoing.

The Consumer Bankers Association applauded the changes announced Monday but called on the SBA to resolve delays.

Without addressing the problems, “this two-week window will not fundamentally alter the roadblocks businesses are facing,” Richard Hunt, the group’s chief executive, said in a statement. “It is like giving everyone a train ticket on an unfinished railroad.”

The SBA has said it is working with lenders to resolve the holds, including by giving them increased authority to certify that applicants are eligible for the program.

Write to Amara Omeokwe at

  • 02/23/2021
  • Amara Omeokwe