There have been recent changes to the Paycheck Protection Program Loan (PPP) by the Small Business Administration (SBA). The PPP was part of the federal relief program under the CARES Act to give small business loans during the pandemic. The federal government has amended the PPP to assist rural, urban, and underserved areas. Do you still need a PPP Loan to help with your small business? The PPP Loan application deadline is March 31, 2021. Here are some of the changes you need to know about the PPP Loan.
As mentioned, the PPP Loan was changed to better serve small businesses in rural, urban, and underserved areas. When first rolled out the PPP Loan was criticized for not considering the smallest small business. Now, the PPP Loan calculation has been revised to include independent contractors, sole proprietors, and self-employed individuals for support. If your business falls under one of these three types of business, apply for the PPP Loan.
Previously, if you had been arrested or convicted for a felony related to financial assistance fraud five years ago or had any felony within the previous year, you were ineligible for the PPP Loan. Now, you can apply as long as you are not incarcerated at the time of applying for the PPP Loan. Also, business owners who have been delinquent on student loans now apply for a PPP Loan. Last, small business owners who are legal residents and Green Card holders with visas are eligible to apply. If you are an independent contractor or sole proprietor who already received a PPP loan before March 3, 2021, you cannot amend your loan. However, if a sole proprietor or independent contractor has a 25% cut in revenue for any quarter in 2020, compared to the same quarter in 2019, they can get a Second Draw PPP Loan. For more details about the amended PPP Loan please visit whitehouse.gov or sba.gov to apply for a PPP Loan. The sooner you apply, since the window of opportunity will be closing on March 31.
We want to mention that during these challenging times some small businesses, unfortunately, laid people off. With the recent passing of the American Rescue Plan (aka the stimulus bill), part of the deal struck was a $10,200 tax waiver for those who received unemployment benefits in 2020. Taxpayers who had support in 2020 will not have to pay the first $10,200 of unemployment benefits they received. This tax waiver is only for 2020, not for 2021.
Do you still have questions about the PPP Loan? The great news is SWVA Tax & Accounting can help you navigate the complexity of the PPP Loan. SWVA Tax & Accounting is a full-service accounting firm that specializes in the needs of small businesses. Please reach out and contact us at 540-250-3198 or schedule an appointment today. We’ll run the numbers, while you run the business.