There’s a second chance for business owners, who may have been denied Paycheck Protection Program loans previously. 

When the Small Business Administration began writing rules for who is eligible for a PPP aid last year after the passage of the CARES Act, it took a strict stance against business owners with a felony conviction or a pending charge.

As a result, untold numbers of business owners for that critical aid program were denied.

But for some of those applicants, the rules have changed. It might be time to take a second crack at a PPP loan. That's because the SBA has expanded its eligibility guidelines to include business owners who may have been denied in their initial application.

That was then, this is now

When the program first rolled out, the SBA deemed any business owner – defined as anyone with a 20 percent ownership stake in the company who must be included in the loan application – ineligible if they had been convicted of a felony in the past five years.

Under the change, however, that lookback period for most felonies has been shortened to one year. Caveat: if the offense involved bribery, embezzlement, fraud or making a false statement on a loan application or application for federal assistance, the window remains five years. The agency also updated the restrictions for business owners on probation or parole. Previously, probationers or parolees were ineligible for PPP loans. Now, the SBA is only excluding business owners whose probation or parole began within the past year for most felonies, or within the last five years for fraud and the other felonies that trigger the longer lookback period.

Business owners who are currently incarcerated are still ineligible.

President Biden recently signed a law extending the current filing deadline for PPP loan applications to May 31 from March 31. It’s important to remember that this application extension comes amid increased enforcement efforts to crack down on fraud under the program. So while a denial of a past application due to an old criminal conviction should not deter a business owner from applying again under the new rules, all applicants must ensure that the facts and figures they present to the government are scrupulously accurate.