26 April 2021
Updated April 26th, 2021 Congress recently voted to approve an extension to the SBA Paycheck Protection Program (PPP) loan application deadline.
The deadline (previously for March 31st) has been extended to May 31st, thus allowing small business owners more time to get any funding needed as a result of the COVID-19 crisis.
In addition to the PPP loan deadline extension, more funding has opened up to new types of business owners who have filed a Schedule C (the "Profit or Loss from Business" part of the Form 1040), including:
Because of how the PPP loans were previously calculated, many small business owners who worked by themselves received little, if any assistance.
Now, business owners like general contractors, hair stylists, independent retailers, and more, will have an opportunity to receive help.
The loan calculations will be revised and $1 billion dollars of relief will be set aside for business owners in these categories without employees who are in low-and-moderate income areas (LMIs).
Previously, individual business owners who owned at least 20% of a business, who are delinquent or have defaulted within the last 7 years on a federal debt, including student loans, were not eligible to apply for the PPP loan.
This will no longer be the case. The SBA and Departments of Treasury and Education will work together to remove this restriction and provide more accessibility to these loans.
Previously, if a business owner owning 20% or more of a business had either an arrest or conviction for a felony related to financial assistance fraud within the past 5 years or any other felony within the past year, they were not eligible to apply.
That restriction will be lifted and those business owners with past arrests or convictions will now be eligible to apply for the SBA Paycheck Protection Program loan.
For many business owners, being a lawful U.S. resident but non-citizen meant there was little guidance available on how to apply for the SBA PPP loan. For business owners who hold Green Cards or are in the U.S. on a visa, the application process wasn't clear.
Now, these business owners will have access to the small business PPP loan by using their Individual Taxpayer Identification Numbers (ITIN) in applying.
Many businesses are struggling due to the current economic climate in the midst of the COVID19 pandemic. But who qualifies to apply for an SBA PPP loan? According to the SBA, the following entity types are eligible:
Note: The application process for an SBA PPP loan slightly differs depending on whether or not you've already applied and/or received funding. You can find more information on first vs second draw PPP loan applications here.
If it's your first time applying for the small business PPP loan, follow these steps:
Before applying for the loan you choose, keep in mind that the lender may require you to produce collateral. This is why it's a good idea to consider getting business insurance.
Whether your collateral is your business's property or another asset, knowing that the collateral is protected by insurance coverage can put a lender at ease.
If you don't have business insurance coverage yet, consider getting:
General liability insurance. This type of policy can help cover cost from property damage, third party accidents, or bodily injury. For example, if a customer gets hurt while you're working and sues you, this coverage could help to cover their medical cost and associated legal fees.
Professional liability insurance. This type of policy helps to protect you from claims of negligence. For example, say you're a marketing consultant and your client blames you for the business losing money after a campaign you ran; they decide to sue. This coverage can help to cover legal representation and other costs.
If you're not sure what insurance coverage may be right for your business, don't worry. You can use our quote comparison tool that helps you compare quotes for FREE.
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When you download the first draw PPP loan application, keep in mind that the latest version was created on February 17, 2021, indicated on the page.
If you've already applied for and/or received an SBA PPP loan, then you may be eligible for a second draw, according the SBA.gov website, if you:
You can download the small business PPP second draw loan application here.
Note: If you're unsure which steps to take in the small business PPP loan application process, SBA.gov has local business assistance you can utilize here.
We're heading into the one year mark of living and working through a pandemic, and if you're a business owner, we recognize how much hard work you've put into keeping your business afloat.
It's hard enough to start, grow, and protect a business during "normal" times, let alone during a global pandemic.
We hope that by extending the PPP loan deadline to May 31st, more small businesses than ever will be able to access the funding they need to make it through this unprecedented crisis.
I’ve told stories since I learned to talk and written since I could hold a pen. As a small business owner myself - I'm a freelance writer and yoga teacher - I love contributing to the entrepreneurship community in different ways (including writing for Simply Business!). When I’m not drafting articles for SB, I can be found on my yoga mat, perusing an indie bookstore, and writing (with my cat nearby of course).
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
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