Small businesses in the Bronx could benefit from a temporary effort to get federal aid relief to businesses that lost out in the first Paycheck Protection Program almost a year ago.
The Biden Administration announced that for two weeks starting Wednesday, Feb. 24, loan applications would only be processed for businesses with fewer than 20 employees. Changes in eligibility rules will also take effect.
Previously, businesses that could not show a profit were ineligible for Paycheck Protection loans, and those making small profits typically received minuscule loans that provided no meaningful relief. Under the revised rules, if a business can show it met a specified gross income level, it can qualify for a loan even without showing a profit.
Another program change is that being in default or delinquency on a federal student loan will not disqualify applicants. Additionally, those with recent felony convictions will now be eligible as long as their conviction is not tied to fraud.
The agency has also clarified that business owners who are not US citizens but are lawful residents are also welcome to apply.
The goal of the program is to provide aid to some of the nation’s smallest businesses, those that now have the resources to devote towards going through the government loan process. In announcing the changes, the White House said in a statement it is hoped this targeted application window will free up banks to focus on these smallest businesses.
The changes for businesses with 20 or more employees will only impact the application process; the freeze does not apply to those currently receiving aid.
Paycheck Protection Loans can be forgiven under certain circumstances, meaning they would not have to be repaid. To qualify, during the eight to 24 weeks after a loan is granted, a business must maintain employee and compensation levels, the loan must be spent on payroll and other eligible expenses, and at least 60% of the loan must go to cover payroll.
The program will run from February 24 through March 10. Information on where and how to apply can be found here: Paycheck Protection Program (PPP) loans