Senator Collins Presses Administration to Preserve PPP Eligibility for New Owners of Small Businesses
U.S. Senator Susan Collins, a co-author of the Paycheck Protection Program (PPP), sent a letter calling on the Biden Administration to ensure that eligible small employers and their employees are able to access the PPP regardless of a change in business ownership.
Previous guidance issued last year advised that a business that was in operation on February 15, 2020, and subsequently changed hands could still apply for a forgivable PPP loan. According to the Treasury Department's and Small Businesses Administration's (SBA) websites, however, this guidance is in the process of being revised.
In her letter, Senator Collins urged the Treasury Department and the SBA to issue updated guidance to clarify that small businesses with new ownership after February 15, 2020, are qualified to receive PPP funds.
"Since PPP re-opened last month, I have heard from multiple Maine employers who bought an already established small business in the last year, in some cases with a period of inactivity before reopening, and are seeking a PPP loan to help their businesses survive the pandemic," Senator Collins wrote. "The delay in the release of new guidance is causing confusion and preventing small employers from receiving much-needed relief during the current round of PPP funding. I ask you to issue updated guidance immediately so that small businesses that experienced a change in ownership after February 15, 2020, are able to access the current round of PPP funding."
Senator Collins secured $284.5 billion to reopen the PPP in the December COVID-19 relief law. Financial institutions across Maine and the country are currently accepting and processing PPP applications for eligible small businesses seeking a forgivable loan for the first time and for those hardest hit small businesses who may receive a second forgivable loan. According to the latest data from the SBA, 8,542 Maine small employers have been approved for a total of $601,296,036 in forgivable PPP loans in 2021. Under a new Biden Administration policy, between February 24 and March 9, there is a two-week period during which only businesses with fewer than 20 employees may apply for a PPP loan.
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