Biden Reforming PPP To Target Overlooked Small Businesses
Aiming to help the smallest businesses that have been overlooked amid the pandemic, US President Joe Biden wasdue to unveil reforms to a vital aid program on Monday.
The Paycheck Protection Program (PPP) has been a key lifeline to businesses amid the Covid-19 crisis, but the smallest among them, those least likely to have relationships with banks, often missed out.
The government will open a two-week window starting on Wednesday where only firms with less than 20 employees will be able to apply for relief, the White House announced.
That 14-day period will give banks and lenders to target the 98 percent of the smallest businesses that fall in that category, to receive loans that in most cases are forgiven.
“They are Main Street businesses that anchor our neighborhoods and help families build wealth,” the White House said in a statement, noting that “these businesses often struggle more than larger businesses to collect the necessary paperwork and secure relief from a lender.”
Many of those are owned by women and people of color, especially shops where the owner is the sole employee.
Biden is due to hold an event at the White House to announce the changes later Monday.
The changes also will alter the PPP to ensure sole-proprietorships can receive sufficient aid, remove restrictions on loans for business owners who have a criminal record in the past year, or who are delinquent on federal student loan payments.
He also will reform the program to provide funding to legal immigrants.
The Small Business Administration (SBA) that administers the PPP said earlier this month that the program has approved $103 billion in loans to more than 1.4 million small businesses, with 82 percent of all loans going to businesses requesting less than $100,000.
The aid program was approved in late March 2020 as part of the $2.2 trillion CARES Act that aimed to help firms forced to shut down or that saw earnings collapse.