Biden revamps PPP loans to target smaller businesses and individual contractors
Starting on Wednesday, Feb. 24 and lasting for two weeks, only businesses with fewer than 20 employees will be able to apply for PPP loans.
The Biden-Harris Administration has announced several reforms to their latest round of Paycheck Protection Program (PPP) funding to target the smaller businesses that were excluded from previous renditions of the program.
Today, @POTUS announced new steps to increase #EquitableAccess of the #PaycheckProtection Program for America’s smallest businesses. Watch this @WhiteHouse video for an important update: https://t.co/vmPm9ZKyTf
— SBA (@SBAgov) February 22, 2021
“Small businesses are the engines of our economic progress; they’re the glue and heart and soul of our communities. But they’re getting crushed,” Biden wrote in a White House statement.
The revamped funding program will extend much-needed resources to help small businesses survive, reopen and rebuild.
The changes are primarily aimed at assisting businesses with no employees, like independent contractors and self-employed individuals who could not qualify for previous aid because of business cost deductions.
This is such important policy. Small business owners I know have called me in tears seeking help keeping their doors open because they couldn’t get PPP loans approved, while big businesses with lawyers, bankers and lobbyists got millions quickly. This levels the playing field. https://t.co/MwAoucxUeg
— Ana Navarro-Cárdenas (@ananavarro) February 22, 2021
Starting on Wednesday, Feb. 24, there will be a two-week period where only businesses with fewer than 20 employees can apply for relief through the program.
Administration officials said the program would also set aside $1 billion for businesses without employees in low and moderate-income areas, mostly owned by women and people of color.
If you own a small business, NOW IS THE TIME TO APPLY FOR #PPP. On Wednesday, February 24, 2021 at 9 am ET, SBA will establish a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees.#ppploan #stimulus #loan #smallbusiness #sba
— Horsford CPA (@HorsfordCPA) February 23, 2021
The Small Business Administration (SBA) also plans to provide new guidance clarifying that legal U.S. residents who are not citizens, such as green-card holders, cannot be excluded from the program. Green-card holders will be able to apply for the relief by using their Individual Taxpayer Identification Numbers.
The Biden administration also said it would eliminate exclusions that prohibit business owners that are delinquent on student loans from receiving the aid.
Currently, PPP loans are unavailable for any business with at least 20% ownership by an individual who is delinquent or has defaulted within the last seven years on a federal debt, including a student loan.
Another change the Biden administration made in PPP this week will make it easier for student loan borrowers who have defaulted or are delinquent to get forgivable loans for their small businesses via @CNBC by @AnnieReporter https://t.co/hWYZwRQjWL
— Carmen Reinicke (@csreinicke) February 23, 2021
Millions of Americans are delinquent on student loans, including a disproportionate number of Black borrowers. The SBA will work with the Departments of Treasury and Education to remove this restriction and broaden access to the PPP.
In addition to these changes, the Biden-Harris administration plans to take steps ensuring that the relief is distributed equitably and in a way that values each taxpayer’s dollar.
The administration has revamped the PPP loan application to promote transparency and accountability. Through self-reporting of demographic data, it will be easier to document the impact the PPP is having among different population segments.
They are also working to update key areas of the SBA website to help more business owners find resources to better understand their options and successfully complete the applications.
Looking forward, the administration is concerned with learning more about the current challenges and opportunities within the implementation of emergency relief programs.
In recent weeks, President Biden has met virtually with small business owners and Black Chambers of Commerce to discuss the issues facing small businesses right now, and how passing the American Rescue Plan will provide critical relief.
.@RepUnderwood says "relief is coming" when it comes to healthcare, thanks to legislation she wrote & got into the American Rescue Plan, which is expected to pass the House this week and be enacted into law by mid-March. | Hear more from Rep. Underwood: https://t.co/cc70ifbSJf pic.twitter.com/qkCIcedj44
— WindyCityLIVE (@WindyCityLIVE) February 23, 2021
In his statement, Biden talked about his American Rescue Plan, and why it is so important for Congress to pass it into law as soon as possible. Biden said that he is open to hearing ideas about how to improve the plan as well as make it cheaper, but emphasized that it must be clear who is being helped and who may be hurt.
“I always try to help all the country’s small businesses, and families, the workers, the communities that depend on them to survive, recover and grow,” he concluded.
This article is part of Broke in Philly, a collaborative reporting project among more than 20 news organizations focused on economic mobility in Philadelphia. Read all of our reporting as brokeinphilly.org.