Update: administrator Biden. announces PPP changes | Advocacy
UPDATE: This article, originally published on February 24, 2021, has been updated with new information for music creators and small music businesses based on the recent adoption of the US bailout and new updates. regulatory updates by the Small Business Administration. It is important to note that as of March 3, self-employed people (including independent contractors, concert workers and sole proprietors) will be eligible for an increased PPP loan amount based on their gross income. According to the SBA, this change is limited to applicants who had not yet been approved for a loan by March 3.
In addition, according to the American rescue plan, eligible businesses can now apply for both a PPP loan and a grant for closed site operators (SVOG). Previously, potential SVOG candidates were prohibited from seeking help from the programs. Under the new law, the PPP loan will offset the potential amount of an SVOG. The SVOG program will be open to applicants on April 8 and the PPP remains open to all small businesses until May 31.
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The Biden Administration and Small Business Administration (SBA) announcement new changes to the Paycheck Protection Program (P3) on Monday, February 22, which will result in increased access to essential financial relief for the creative workforce. Trained as part of CARES Law, the PPP has enjoyed considerable bipartisan support due to the program’s ability to quickly provide relief to skilled small businesses, including sole proprietors and independent contractors. The PPP administers advantageous loans to eligible borrowers through participating financial institutions, and many of the loans are converted into grants if they are primarily used to finance salary expenses.
While the relief program is appreciated and used by the music community, many struggling creators initially found themselves with limited or no access to available loans administered by the SBA. But starting today, the SBA is attempting to correct these inequalities and other long-standing programmatic flaws by implementing new guidelines.
Today, @POTUS announced new measures to increase # Equitable Access of #PaycheckProtection Program for the smallest American businesses. Check it out @White House video for an important update: https://t.co/vmPm9ZKyTf
– SBA (@SBAgov) February 22, 2021
Many creators will be directly impacted by the SBA’s updated funding formula for sole proprietors, independent contractors and freelancers. Previously, the PPP loan was calculated by multiplying an applicant’s payroll costs by 2.5, which resulted in a much lower loan for sole proprietors compared to larger companies. According to the updated guidelines, the SBA will calculate the loan amount for these types of workers using gross income instead of net profits, resulting in larger payouts for many members of the music ecosystem. This change is effective March 3 and applies to applicants who have not yet been approved for a PPP loan in 2021. The Recording Academy has consistently advocated for this change since March 2020, which will help make the PPP loans more suited to the needs of the self-employed.
Since the start of the program, many minority-owned businesses located in underserved communities have had difficulty accessing loans due to the lack of a formal pre-existing relationship with large financial institutions. To correct this program, the SBA allocated $ 1 billion in funds to low and moderate income areas. While this is a step in the right direction, the Biden administration and the SBA must continue to increase awareness and assistance to these underserved communities and minority-owned institutions.
The SBA has also prioritized assistance to businesses with 20 or fewer employees, which began on February 24 and ended on March 9, 2021. Previously, these businesses had difficulty obtaining PPP funds due to the Overcrowded loan portal. Understanding that many businesses in the music ecosystem are extremely small operations, the Academy has long advocated for the SBA to prioritize financial aid to smaller businesses, many of which are on the verge of collapse in due to the lasting impact of the pandemic.
Starting today, the Biden-Harris administration is opening an exclusive 14-day PPP loan application period for businesses and nonprofits with fewer than 20 employees. Head toward https://t.co/slFWiCx2W0 to learn more. pic.twitter.com/zVzm0xNn1q
– The White House (@WhiteHouse) February 24, 2021
Other changes to the guidelines include removing borrowing restrictions for business owners convicted of non-fraudulent felons, removing delinquency disqualifiers from federal student debt, and expanding the program to qualify all federal student debtors. legal residents of the United States. Learn more about the SBA application process website.
While many of these promising changes will positively impact the entire music ecosystem, Congress understood the need for additional relief and adopted President Biden’s “American Rescue Plan” accordingly. The aid program responds to the many complex challenges faced by creators by expanding unemployment aid, earmarking funds to help small businesses survive, and investing in the National Endowment for the Arts (NEA). The Academy congratulates President Biden and Congress on passing this landmark bill, and looks forward to working together to ensure the fair and transparent implementation of these vital relief programs, many of which will go a long way to help the whole of the world. musical ecosystem.
Editor’s Note: This article was originally published in February 2021 and has been updated to reflect the adoption of the US bailout at the end of the 14-day exclusive application window.