Earlier this week, the White House announced several changes to the Paycheck Protection Program (PPP) in an effort to more equitably target small businesses in the greatest need for COVID-19 relief. Starting February 24, the Biden Administration is opening a 14-day period in which only small businesses with fewer than 20 employees can apply for relief.
The Biden Administration’s recently announced changes will:
- Institute a 14-day period, starting today, February 24, during which only businesses with fewer than 20 employees can apply for PPP loans.
- Help sole proprietors, independent contractors, and self-employed individuals receive more financial support by revising the PPP loan calculation formula to provide these applicants with more relief. (ABA and member bookstores have been strongly advocating for this change.)
- Eliminate an exclusionary restriction that prevents small business owners with prior non-fraud felony convictions from obtaining relief through PPP.
- Eliminate an exclusionary restriction that prevents small business owners who are delinquent on their federal student loans from obtaining relief through PPP.
- Ensure 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 PPP.
In addition to these changes, the White House announced steps committing itself to addressing fraud and abuse, promoting transparency, and conducting stakeholder outreach.
Eligible stores are encouraged to take advantage of this opportunity to apply for either their first or second PPP forgivable loan. The 2020 year-end relief bill made important changes to PPP so that business expenses paid for with PPP funds are tax deductible and borrowers are no longer penalized for receiving an Economic Injury Disaster Loan grant. Bookstores are eligible for a second draw PPP loan if they 1) employ 300 or fewer employees, 2) have fully exhausted their first PPP loan, and 3) demonstrate at least a 25 percent reduction in gross receipts in any quarter in 2020 compared to the same quarter in 2019.
Regardless of whether your bookstore is eligible for this exclusive 14-day period to apply for PPP, booksellers are encouraged to explore other relief options they may be eligible for, including the Employee Retention Tax Credit (ERTC), which provides a refundable tax credit for certain wages paid to employees through June 30, 2021. The 2020 year-end relief bill extended and expanded the ERTC to, among other things, allow businesses that received PPP to qualify. To learn more, see ABA’s FAQ about the ERTC here.