WASHINGTON—The federal government is making changes to the Paycheck Protection Program that broaden eligibility for business owners who previously have been convicted of certain felony crimes.
The U.S. Small Business Administration is revising its eligibility guidelines regarding "those with felony histories," the agency said. "The look-back period has been reduced from 5 years to 1 year to determine eligibility for applications, or owners of applicants." The change covers people who committed non-financial felonies.
The new standards apply to those who have been convicted of, or submitted either a guilty or no contest plea to a crime. People on probation or parole also are covered, the agency said.
These new eligibility rules do not apply to those with financial-related felonies as the look-back period remains five years. This includes people convicted of crimes such as bribery, embezzlement, fraud and making a false statement on application for a loan or an application for federal financial assistance.
Pre-trial diversion program status also no longer impacts eligibility, the SBA said.
PPP, in response to the financial problems created by COVID-19, has provided hundreds of billions of dollars in financial assistance to help companies remain open.
The program provides forgivable loans under certain conditions and is viewed as a lifeline for businesses disrupted by the pandemic. Eligibility for PPP loan forgiveness also recently was relaxed, including extension of the program period from June 30 to Dec. 31.
The changes also relaxed the amount of money that must be spent on employees from 75 percent to 60 percent, providing more money to cover other business costs.
The SBA said it made the changes in consultation with the U.S. Department of the Treasury.