Changes to PPP loan program could offer new lifeline to small businesses

Jeff Newgard

Changes announced Monday to the Paycheck Protection Program could offer hope to small businesses that have felt shut out until now, Bank of Idaho President and CEO Jeff Newgard said.

The Biden administration's changes include a 14-day period, beginning Wednesday, during which only businesses with fewer than 20 employees can apply for PPP relief. Sole proprietors, independent contractors and self-employed individuals are now allowed to base their loan calculations on gross income rather than net income.

"These adjustments will be game-changers for so many of our smallest businesses," Newgard said. "Previously, these types of businesses felt locked out of PPP assistance. We hope these changes make them reconsider."

Businesses affected by the Coronavirus pandemic can learn more details at https://www.bankofidaho.com/cares. Depending on the specific rules of the program, PPP loans may be eligible for full or partial forgiveness if the money is used for qualifying costs.

Newgard said SBA programs have become so adept at helping small businesses that Bank of Idaho has
added a new department solely dedicated to SBA lending. "These programs can be real life lines for small businesses, so we're committed to getting as much of that help into our communities as we can," he said.

New PPP updates include:

• The 14-day period, starting Wednesday, limiting applications to businesses with fewer than 20
employees. During this period, however, applications already in the pipeline
or requiring error resolution will continue to be processed.

• Revising the loan calculation formula for sole proprietors, independent contractors, and self-
employed individuals to use gross income instead of net income, as advocated by ICBA. Additional details are expected on whether this will be limited by number of employees or otherwise. Further, $1 billion will be set aside for PPP loans to businesses in this category without employees located in low- and moderate-income (LMI) areas.

• Eliminating restrictions preventing small-business owners delinquent on their federal student loans or with prior non-fraud felony convictions from qualifying for the PPP.

• Ensuring access for non-citizen small-business owners who are lawful U.S. residents by
clarifying that they may use Individual Taxpayer Identification Numbers to apply for relief.

The administration also said it has revised the PPP loan applications to encourage self-
reporting of demographic data, and it will conduct stakeholder outreach on PPP challenges. The SBA also will launch an initiative to enhance lender engagement with opportunities for lenders to provide
recommendations and ask questions about the PPP and obtain resolution of open questions and concerns in a more streamlined way.

Additional PPP information and resources are available online at sba.gov.