JGI / Tom Grill | Tetra images | Getty Images
Self-employed and gig workers who have been waiting for new rules that would mean bigger forgiving loans through the Paycheck protection program can now proceed with their applications.
The agency is ready from Friday to accept and process updated PPP applications from sole proprietors who want to make use of a new loan calculation, the agency confirmed.
This means that sole proprietors can finally submit their applications to borrowers, who can send them to the SBA to be processed according to the new guidelines for calculating the loan.
More from Invest in You:
Lost job, no childcare: a year in the pandemic is not good with women
The IRS received 35 million tax returns in one week, while Americans would file them
Smallest businesses get extra PPP help. What to know before applying
The changes come after the Biden administration announced PPP updates in late February, including the revised calculation of one – man loans, as well as new rules for some non-citizens, people with certain criminal records and people who have failed or are guilty was to the student loan debt. .
In addition, the administration announced a 14-day priority window for businesses with less than 20 employees to apply to PPP. The period began on February 24 and will end on March 9.
Although the focus of the priority period was to give the smallest businesses, which are disproportionately owned by women and minorities, an advantage in receiving funding, the timing of the new rule for calculating loans has led to confusion for some. The SBA only released clues about the new calculation to lenders on March 3 and was only ready to process updated applications in its system on Friday.
What to know before applying
Now that the SBA is ready to accept and process applications, small businesses need to be able to apply for PPP and be subject to the new loan calculations.
Some credit providers may be sure to upload the new applications into their system, so business owners need to confirm that they have the right forms to apply.
The updated PPP applications for self-employed and sole proprietorships filing IRS Form 1040 Schedule C now call for the total amount of gross income found on line 7 of the tax form. Previously, supporters of Schedule C applying for PPP loans were asked to give the net profit to the SBA, starting from line 31 on the form.
Those applying for a first draw PPP loan should use Form 2483-C and those applying for a second draw loan should use Form 2483-SD-C, which contains the new calculation information.
The priority application window
For small businesses that are subject to the new rule and want to take advantage of the priority application period, tap the time. The window closes on March 9 at 5pm ET, after which lenders can process applications of all sizes from small businesses.
One-man businesses will still be able to request loans and see what is being processed by borrowers after the priority window is closed. The deadline for the overall program is currently March 31, unless extended by Congress.
In addition, lenders say they do not think the program before the March deadline will not be enough. From this year to February 28, the SBA approved 2.2 million loans, equivalent to more than $ 156 billion, just over half of the $ 284 billion the program had when it reopened in January.
“Given the rate at which the funds have risen, it does not appear that by the March 31 deadline, everyone will be using them,” said Alex Prombaum, president of Liberty SBF, a non-bank lender. “The priority window may expire, but that does not mean people are left out in the cold.”
SIGN UP: Money 101 is an 8-week financial freedom course delivered weekly to your inbox.
SIGN OUT: Here is the credit point you need to buy a home Growth with acorns + CNBC.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.