The Biden administration on Monday announced several planned changes to the Paycheck Protection Program aimed at delivering “equitable relief” to small businesses hard hit by the coronavirus pandemic, particularly minority-owned businesses and those that may have had difficulty securing forgivable loans.
“While the Paycheck Protection Program has delivered urgent relief to many businesses across the country, the initial round of PPP last year left too many minority-owned and mom-and-pop businesses out while larger, well-connected businesses got 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, beginning Wednesday. Larger businesses will not be allowed to apply during that time.
Beginning next week, a number of new eligibility rules will take effect: $1 billion will be set aside for sole proprietors, such as home contractors and beauticians. 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 under the new directive are small-business owners with non-fraud-related felonies, those delinquent on their federal student loans, and some non-citizen residents, such as Green Card holders or those in the country on visas, all of whom were previously ineligible.
The program builds upon the forgivable-loan program created by Congress last year. The program, which closed in August but later reopened in December to allow owners to apply for a second loan, has struggled to help the nation’s smallest businesses as the coronavirus pandemic has caused rolling shutdowns across the country for much of the last year.
Congress targeted the second round of loans to businesses with fewer than 300 employees that have faced a revenue decrease of at least 25 percent during the first, second, or third quarters of 2020. Businesses with fewer than 10 employees saw a 60 percent boost while rural businesses experienced a 30 percent increase.
Lawmakers set aside $12 billion for minority-owned businesses: funding that has been distributed through Community Development Financial Institutions and Minority Depository Institutions has increased by 40 percent, according to a statement from the White House.
Since December, roughly $134 billion has been lent to 1.8 million small-business owners with about half of the allocated funds remaining. President Biden’s $1.9 trillion relief bill would add an additional $7 billion to the program.