PPP changes grant some companies access to relief

Earlier this week, the White House announced several changes to the Paycheque Protection Program (PPP) in an effort to more equitably target the small businesses most in need of COVID-19 assistance. Starting February 24, the Biden administration opens a 14-day period during which only small businesses with fewer than 20 employees can apply for relief.

The changes recently announced by the Biden administration:

  1. Institute a 14-day period, starting today, February 24, during which only companies with fewer than 20 employees can apply for PPP loans.

  2. Help sole proprietors, independent contractors and freelancers receive more financial support by revising the P3 loan calculation formula to provide more relief to these applicants. (The ABA and member bookstores have advocated strongly for this change.)

  3. Remove an exclusionary restriction that prevents small business owners who have previously been convicted of non-fraudulent crimes from obtaining redress through P3s.

  4. Eliminate an exclusionary restriction that prevents small business owners who are behind on their federal student loans from getting relief through P3s.

  5. Ensure access to non-citizen small business owners who are legal residents of the United States by specifying that they can use Individual Tax Identification Numbers (ITINs) to apply for a PPP.

In addition to these changes, the White House announced measures pledging to fight fraud and abuse, promote transparency and raise awareness among stakeholders.

Qualifying stores are encouraged to take this opportunity to apply for their first or second PPP forgivable loan. The 2020 Year-End Relief Bill made significant changes to the PPP so that business expenses paid with PPP funds are tax deductible and borrowers are no longer penalized for receiving a loan. economic disaster loan grant. Bookstores are eligible for a second PPP loan if they 1) employ 300 or fewer employees, 2) have completely exhausted their first PPP loan, and 3) demonstrate a reduction of at least 25% in gross revenue in a quarter in 2020 compared to the same quarter in 2019.

Whether or not your bookstore qualifies for this exclusive 14-day period to apply for a PPP, booksellers are encouraged to explore other relief options to which they may be eligible, including the retention tax credit. (ERTC), which offers a refundable tax credit for certain salaries paid to employees until June 30, 2021. The 2020 end-of-year relief bill extended and broadened the ERTC for, between others, allow companies that have received a PPP to qualify. To learn more, see ABA’s ERTC FAQ here.

See the full Biden administration announcement here.

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