A proposed rule would end a 40-year moratorium on participation in the Small Business Administration's flagship 7(a) program by nondepository lenders. However, staffing constraints would limit the number of new licenses to just three at the start.
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Newity was founded to buy and administrate Paycheck Protection Program loans. Now that the program has ended, the company is teaming with a bank on a platform that offers Small Business Administration 7(a) loans.
Dive Brief:
The Small Business Administration released new guidance Wednesday allowing sole proprietors, independent contractors and the self-employed to use gross income rather than net profit to calculate the amount of Paycheck Protection Program funding they should receive.
The changes come during a two-week window in which the PPP portal until March 9 is accepting applications only from businesses with fewer than 20 employees. However, the portal is slated to stop taking applications March 31.
The SBA approved nearly 2.2 million loans worth $156.2 billion between PPP s January relaunch and Feb. 28, according to agency data. That accounts for just more than half of the $284 billion a December bill earmarked for the program. The new guidance, combined with the prospect of leftover funds, has some bankers lobbying for PPP to extend beyond March.
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