Biden administration to review small business PPP loans to reach minority small businesses
US President Joe Biden will launch changes to America’s main coronavirus assistance program for small businesses on Monday in an attempt to reach minority-owned small businesses and sole proprietorships left behind in previous rounds of aid .
Biden administration officials said that for two weeks starting Wednesday, the Small Business Administration will only accept paycheck protection program (PPP) forgivable loan applications from companies with less than 20 employees in order to ensure that they are not squeezed out by big business.
The changes, which will be officially announced by Biden on Monday, come as small business bankers say demand for paycheck protection loans is slowing as businesses reopen.
When the PPP launched in April 2020 at the height of coronavirus lockdowns on a $ 3 trillion relief bill, its initial $ 349 billion ran out within two weeks. Congress approved an additional $ 320 billion in May, but the program expired in August with about $ 130 billion in unused funds.
The program was relaunched on January 19 with $ 284 billion in new funds from a coronavirus aid bill passed at the end of December, and a Biden administration official said about 150 billion dollars of PPP were still available.
But officials in the Biden administration said there are still many minority and very small businesses in low-income areas that have not been able to receive assistance.
The changes are intended to make it easier for businesses without employees – sole proprietors, independent contractors, and self-employed workers such as house cleaners and personal care providers – who previously could not qualify because of business cost deductions.
The Small Business Administration will revise the rules to match the approach used to enable small farmers and ranchers to receive assistance, the companies said.
Officials said the program will also set aside $ 1 billion for unemployed businesses in low- and middle-income areas, which are 70 percent owned by women and people of color.
The SBA will provide new guidance making it clear that legal residents of the United States who are not citizens, such as green card holders, cannot be excluded from the program. The Biden administration will also remove exclusions that bar a business owner who is behind on student loans from participating in the program.
Business owners who have been arrested or convicted for non-fraudulent felony in the previous year are excluded from the program, but officials in the Biden administration have said they will adopt bipartisan proposals from the Senate to remove this restriction – unless the applicant is currently incarcerated.