February 13, 2021
When the first round of the Paycheck Protection Program (PPP) was rolled out by Congress early last year to help “small businesses” pay employees, utilities and rent; it became very clear that many very small businesses and self-employed were shut out.
One of the biggest hurdles was the SBA requiring “net profit” reflected on the 2019 income tax return to be the determinant of the size of the loan allowed to be requested on the PPP application.
For the self-employed the “net profit” rule resulted in PPP applications being rejected. The smallest of our nation’s businesses, one-person operations, were blocked from any financial assistance not because the need wasn’t there, but because of an ill-conceived guideline.
The second PPP round corrected this problem and is allowing the use of “gross profit” from a different IRS form to determine loan amounts—but only for small farmers and ranchers.
Now Small Business for America’s Future, which I co-chair, and 99 other organizations have sent a letter to the SBA, Treasury and the House and Senate Small Business Committees. The letter asks for immediate action to allow all microbusinesses use the new guidelines, not just microfarmers, when calculating the amount of a PPP loan.
President & CEO