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Changes to Paycheck Protection

By Reuben Lewis IV, President, National Financial Planning Group

Digital 2021

On February 22, 2021, the White House announced several changes to the Paycheck Protection Program (PPP) that went into effect on February 24, 2021. These changes are intended to further target “the smallest businesses and those that have been left behind in previous relief efforts.” (1)


If you are a small business owner in need of financial assistance, you may find these changes helpful in securing a PPP loan:


Change #1: Two-Week Exclusive Application Period

Beginning February 24, 2021, the PPP will only accept applications from businesses with 20 or fewer employees. According to the White House, approximately 98 percent of small businesses in America have fewer than 20 employees, yet these small businesses have found it difficult to compete with larger companies for PPP loan access. There will be a 14-day exclusive application period, which is designed to help lenders focus solely on serving these small businesses. (1)


Change #2: Adjustments to the Loan Calculation Formula

The White House has announced that adjustments will be made to the current loan calculation formula. This will be done to address challenges faced by small businesses without employees. These include sole proprietors, independent contractors, and self-employed individuals. In past instances, these business owners have received as little as $1 in PPP assistance or been excluded from receiving funding altogether. In conjunction with an adjustment to the loan calculation formula, $1 billion will be set aside for businesses without employees located in low- and moderate-income areas. (1)


Change #3: Reduce Non-Fraud Felony Restrictions

The PPP Second Chance Act will eliminate some restrictions business owners currently face. Businesses will no longer be ineligible if a 20 percent or greater owner was convicted of a non-financial assistance related felony in the last 12 months unless they are incarcerated at the time the PPP loan application is filed. In addition, the SBA will remove the restriction on business owners with delinquent student loan debt. The removal of these restrictions will broaden eligibility for business owners who previously were unable to utilize PPP loan assistance.1


Small business owners in many sectors of the economy have been impacted by the ongoing pandemic. While vaccination rollouts are helping to slow the spread of COVID-19, businesses across the country are continuing to grapple with capacity limitations, shutdown orders, and other economic hurdles. If you’re a small business owner struggling to make ends meet, now may be an opportune time to apply for a PPP loan. 


1. FACT SHEET: Biden-Harris Administration Increases Lending to Small Businesses in Need, Announces Changes to PPP to Further Promote Equitable Access to Relief. White House. February 22, 2021. Accessible online at

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