The Biden administration on Monday announced several planned changes to the Paycheque Protection Program aimed at providing ‘fair relief’ to small businesses hit hard by the coronavirus pandemic, especially minority-owned businesses and those that may have had difficulty securing forgivable loans.
“While the Paycheck Protection Program has brought urgent help to many businesses across the country, last year’s first round of PPP left too many minority-owned businesses and mothers and children at home, while large, well-connected companies have raised funds quickly ”. an administration official told reporters on Sunday.
Small businesses with fewer than 20 employees will have a two-week window to apply for funding, starting Wednesday. Large companies will not be allowed to apply during this period.
From next week a number of new eligibility rules will come into effect: One billion dollars will be set aside for sole proprietors, such as home contractors and beauticians. The self-employed, sole proprietors and independent contractors were previously excluded or received a pittance, as loan amounts were calculated based on the number of employees.
Also included in the new directive are small business owners who have committed crimes unrelated to fraud, delinquents on their federal student loans, and certain non-citizen residents, such as green card holders or those in the country with visas, all of which were previously ineligible.
The program builds on the forgivable loan program created by Congress last year. The program, which closed in August but reopened later in December to allow homeowners to apply for a second loan, has struggled to help smaller businesses across the country as the coronavirus pandemic has caused phased closures throughout. the country for much of the past year.
Congress targeted second round of business loans fewer than 300 employees who faced a revenue drop of at least 25 percent in the first, second or third quarters of 2020. Companies with less than 10 employees saw a 60 percent increase while rural businesses experienced a 30 percent increase.
Lawmakers set aside $ 12 billion for minority-owned businesses: funding that was distributed by community development finance institutions and minority depositories rose 40 percent, according to a White House statement.
Since December, about $ 134 billion has been loaned to 1.8 million small business owners and about half of the allocated funds remain. President Biden’s $ 1.9 trillion relief bill would add an additional $ 7 billion to the program.
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