2/25/21 - A Message to Providers from Secretary Hou: Update on PPP

February 2021

Dear Stakeholders,

As part of the Consolidated Appropriations Act, 2021, passed by Congress and signed in December 2020, the federal government funded a third round of the Small Business Administration's (SBA) Paycheck Protection Program (PPP), which has provided low-interest and forgivable loans to small businesses across the country since April of last year. The Program received $284 billion in the December 2020 legislative package.

This third round of the PPP opened on January 11, for first-time borrowers, and on January 13, for second-time borrowers. The program was updated in several ways and is focused on: new and smaller borrowers, borrowers in low- and moderate-income communities, second-time borrowers meeting specific qualifications, and community and small lenders.

Second-time borrowers are now eligible to apply for a second loan if: the first PPP loan was spent in full and on authorized uses/expenses, the business has fewer than 300 employees, and the business had at least a 25% drop in gross recipients in 1 calendar quarter (compared to the prior applicable quarter in 2019 or 2020).

Earlier this week, President Joe Biden announced changes to the PPP that aim to target businesses that had a difficult time applying or were prohibited from applying during the first and second rounds and during this current third round.

These changes are summarized in this White House statement and include:

  • Yesterday, Wednesday, February 24, 2021, the PPP application opened for small businesses with 20 or fewer employees only. The application will be open for these small businesses until Wednesday, March 10, 2021. Small businesses with more than 20 employees will be unable to apply for PPP loans during this time.
  • Eligibility rules will change, effective March 1, as follows:
    • The loan calculation formula will be changed for independent contractors, sole proprietors, and self-employed individuals to increase their loan amounts. The Administration is setting aside $1 billion for these individuals.
    • The loan calculation formula will be changed for small farmers and ranchers to also increase their loan amounts. This change will match what was previously authorized by Congress.
    • Noncitizen business owners with green cards or on a visa will be able to apply for loans, using their Taxpayer Identification Number.
    • Business owners with past, non-fraud, felony convictions and business owners who have defaulted on student loans will be able to apply for loans.

For more information on these Program updates, qualifications for first- and second-time borrowers, and the loan forgiveness process, please review the SBA's website as well as the U.S. Treasury's website. Eligible small businesses have until March 31, 2021 to apply for the loans.

IDHS encourages eligible providers to access this funding opportunity, whether as a first-time or second-time borrower. We know your work, and likely your costs, have increased over the last 11 months. This federal program is here to help with those additional costs or lost wages/costs.

The IDHS provider system is what makes this Department so vital to the State and to all its citizens. Thank you and best wishes.


Grace B. Hou

Secretary, IDHS