The Biden Administration recently announced several changes to PPP intended to help small businesses, including lodging operators, and further promote equitable access to economic relief.
Specifically, the administration is targeting PPP access to the country’s smallest employers and those who have previously been unable to participate in the Program.
The most relevant changes for lodging operators include:
- PPP Extension (note this specific bullet point inserted on March 30, 2021): The PPP Extension Act, signed into law by President Biden on March 30, extends the PPP through May 31, 2021. This new deadline gives applicants an additional two months to apply for a first or second draw PPP loan.
- Designate a 14-day period, from February 24 through March 9, during which only businesses with fewer than 20 employees can apply for relief through the Program. This 14-day exclusive application period allows lenders to focus on serving the country’s smallest businesses to help them take maximum advantage of PPP.
- Help sole proprietors, independent contractors, and self-employed individuals receive more financial support. A majority of these types of American businesses without traditional employees are owned by women and racial minorities. However, many of them were structurally excluded from the PPP previously or were approved for only nominal loan amounts because of how PPP loans are calculated. To address this problem, the Biden administration will revise the loan calculation formula for these applicants so that it offers more relief, and dedicate $1 billion of available PPP funds for businesses in this category located in low- and moderate-income (LMI) areas.
- Ease of access to PPP funds for lawful U.S. residents. 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 relief.
- Improving the PPP loan application. To encourage self-reporting of demographic data and better illustrate the impact the PPP is having across various population segments, the Biden administration has modified the PPP application.
The above changes aim to enhance the support available to American small businesses through PPP. To participate in PPP, THLA encourages you to work with an SBA-approved lender such as our partners at TransPecos Banks as quickly as possible.
The current two-week window ending on March 9 is particularly important if you are a small lodging operator with fewer than 20 employees and are seeking to secure a loan through the Program.