As Congress considers extending the government’s flagship small business coronavirus-aid plan, some of the smallest businesses want government officials to make some recent changes in the program retroactive, the Wall Street Journal reported. The new rules allow sole proprietors, independent contractors and the self-employed to use gross income rather than net profit when determining the size of their forgivable loan. The tweak followed complaints that the program had disproportionately benefited larger businesses, leaving behind sole proprietors and many minority-owned businesses. Bharat Ramamurti, deputy director at the National Economic Council, said he was sympathetic to borrowers unable to benefit from the changes. The Biden administration wanted to move quickly on its loan calculation modification and “retroactivity is a separate legal question,” he said. “It didn’t make sense to hold off on allowing all these other businesses to take advantage of [the new rules] if we could at least make the change prospectively for tens of thousands of them,” he said, adding that the best solution would be for Congress to make the changes retroactive. Roughly 164,000 loans have been submitted using the new formula, the Small Business Administration said. Another 136,000 small-business owners who might have benefited from the change received PPP loans this year based on the older, less generous formula, according to figures provided by the SBA.
