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Paycheck Protection Program Updates

February 22, 2021

Capitol National Bank, located in Lansing, has offered the following guidance:

  • Wednesday, February 24, 2021, will begin an exclusive 14-day window in which only businesses with fewer than 20 employees are eligible to apply. Our understanding is after that 14-day time period businesses with over 20 employees will be able to apply. In the meantime, if you have over 20 employees you can still submit your application and it will be sent to the SBA after the 14-day window has closed
  • $1 billion will be allocated for PPP loans going to sole proprietors, independent contractors and self-employed individuals in low-to-moderate-income areas and the loan calculation formula for these applicants will be revised. According to press reports, the revised formula would only be available to new applicants, not retroactive and should be published this week
  • Non-citizens may now apply for a PPP loan using an individual taxpayer identification number (ITIN)
  • Businesses with an owner of over 20% who is delinquent on student debt are now eligible for a PPP loan
  • Businesses with an owner of over 20% who was arrested for or convicted of a felony related to financial assistance fraud in the previous five years or any other felony within the previous year are now eligible (the restriction regarding a PPP loan will apply to businesses with applicants or owners who are currently incarcerated)

Original Info Published on

On Monday, February 22, President Biden announced the following changes to SBA’s coronavirus relief programs to ensure equity:

Specifically, on Wednesday, February 24, 2021 at 9 am ET, SBA will establish a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees. This will give lenders and community partners more time to work with the smallest businesses to submit their applications, while also ensuring that larger PPP-eligible businesses will still have plenty of time to apply for and receive support before the program expires on March 31, 2021.

SBA also announced four additional changes to open the PPP to more underserved small businesses than ever before. While these changes are being implemented, SBA will work with community partners to improve the emergency relief “digital front door” and conduct extensive stakeholder outreach. And, SBA will strengthen its relationships with lender partners to advance equity goals, deliver funding efficiently, and prevent fraud, waste, and abuse. SBA will:

  • Allow sole proprietors, independent contractors, and self-employed individuals to receive more financial support by revising the PPP’s funding formula for these categories of applicants;
  • Eliminate an exclusionary restriction on PPP access for small business owners with prior non-fraud felony convictions, consistent with a bipartisan congressional proposal; 
  • Eliminate PPP access restrictions on small business owners who have struggled to make student loan payments by eliminating student loan debt delinquency as a disqualifier to participating in the PPP; and
  • Ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Number (ITIN) to apply for the PPP.

A critical goal from Congress for the latest round of PPP was to reach small and low- and moderate-income (LMI) businesses who have not received the needed relief a forgivable PPP loan provides. Congress set a $15B set-aside for small and LMI first draw borrowers. With existing policies, the current round has only deployed $2.4B to small LMI borrowers, in part because a disproportionate amount of funding in both wealthy and LMI areas is going to firms with more than 20 employees. The less than 20 exclusivity period combined with the changes to expand access for sole proprietors, ITINs, returning citizens, and student loan debt will help us achieve Congressional goals.


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