National News – President Joe Biden announced changes to the Paycheck Protection Program (PPP), which is the vehicle for helping small businesses weather the Covid-19 pandemic. The modifications to the PPP are a big win for American small businesses, especially business owners of color and our country’s smallest business owners.

The Biden Administration has announced changes in how the self-employed can calculate the size of their PPP loan. Until now, a self-employed PPP loan applicant would use “net income” (Line 31 on Form 1040 of the Schedule C), to calculate the loan amount. Using net income as the basis of determining loan size dramatically reduces the value of PPP loans for self-employed because it excluded eligible expenses.

Going forward, self-employed individuals will use gross income to calculate the PPP loan amount. Additionally, the Biden Administration has set aside $1 billion for businesses in this category without employees located in low- and moderate-income (LMI) areas. “As we have stated from the beginning, including the self-employed in the PPP and other Covid relief programs has been affirming to the nearly 32 million self-employed, but challenges to date with guidance and interpretation of congressional intent has caused confusion and unfortunately, excluded many from attaining a PPP loan.

We are grateful for the continued efforts by the Administration and diverse group of stakeholders to bring attention to these errors and make adjustments to this critical program,” stated Keith Hall, President and CEO of the National Association for the Self-Employed (NASE). 

“The SBA is a frontline agency working to create an inclusive economy, focused on reaching women-owned, minority-owned, low- and moderate-income, rural, and other underserved communities in meaningful ways. While reported data illustrates we have made real strides in ensuring these funds are reaching underserved communities, we believe we can still do better,” says SBA Senior Advisor Michael Roth. “The important policy changes we are announcing further ensure inclusivity and integrity by increasing access and much-needed aid to Main Street businesses that anchor our neighborhoods and help families build wealth.”  

These simple progressive steps by the Biden-Harris Administration further demonstrate the commitment to racial and gender equity, reaching low and moderate-income, rural, urban, and other underserved areas. The SBA will:

• Establish a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees
• 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 federal student loan payments by eliminating federal student loan debt delinquency and default as disqualifiers 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.

Apply here for the Payroll Protection Program

Miguel Alban, senior vice president, and director of Multicultural Banking for Customers Bank, told Black Enterprise, “Unfortunately, last year, many minority small business owners were left out and were not able to secure a PPP loan. We at Customers Bank have a division that focuses on multicultural markets and we were able to help as many as we could, regardless if they were a current customer or not and regardless of the loan size.”

Misinformation, lack of information, and lack of capital have been major obstacles for Black-owned businesses during the pandemic. While this partnership provides a solution for these businesses, it will only work if people know about it.

Customers Bank, a top-5 ranked PPP lender, has participated in over 100,000 SBA-approved PPP loans with an aggregate value of over $5 billion. The bank also has the second-lowest average loan size of the nation’s major PPP lenders. This means many small businesses that couldn’t get loans with the big banks could get smaller loans through this partnership.

Alban added, “This time, we decided to take it one step further and partner with the organizations that serve these communities. These partnerships not only help us fulfill our mission as a community bank, but also plant the seeds for many more great things to come.” Customer Bank

Through the partnership, local institutions hope to help local small businesses to rebound during these tough economic times. Phil Andrews, president of the Long Island African American Chamber of Commerce — New York State’s largest African American chamber, which serves New York City, Long Island, and the downstate counties of Orange, Putnam, Rockland, Sullivan, Ulster, and Westchester—wants to do just that.

In an email to Black Enterprise Andrews shared, “The second round of PPP loans serves as a lifeline for many African American businesses in our network and community that were adversely affected by the pandemic which highlighted many inequities. Our chamber is very fortunate to have formed a partnership with Customers Bank to streamline the process to apply for loans through its white-label program where Customers Bank will handle end-to-end processing, funding, and servicing, including forgiveness.”

Apply here for the Payroll Protection Program. The deadline is March 31, 2021.