on Monday will announce policy changes to the Paycheck Protection Program (PPP) aimed at targeting assistance to businesses that employ 20 or fewer workers and those that are minority-owned.
Biden plans to announce that his administration will institute a 14-day period beginning Feb. 24 and running through March 9 during which only businesses with 20 or fewer employees can apply for PPP loans, according to senior administration officials. Businesses with more than 20 employees will not be able to apply for assistance during this two-week period.
Biden will also announce that his administration is changing its loan calculating formula for sole proprietors, independent contractors, and self-employed individuals to help them obtain more financial support through the program.
In addition, the president plans to eliminate two restrictions preventing business owners from receiving loans through the program: one restricting individuals with prior non-fraud felony convictions from receiving assistance and another that does the same for individuals who are delinquent on their federal student loans.
Finally, Biden will announce new guidance clarifying that non-citizen small business owners who hold green cards or are in the U.S. on a visa can obtain PPP loans.
Officials say the moves are part of the Biden administration’s effort to make equity a priority in its response to the coronavirus pandemic, which has caused over 400,000 small businesses to close and resulted in millions of job losses.
“The president knows how essential small businesses are to cities and towns across the country and how important the millions of jobs they provide are to American families who are already struggling to make ends meet,” a senior administration official told reporters.
“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 and well-connected businesses got funds quickly,” the official continued. “The Biden-Harris administration has put a focus on equity at the center of all of its policies and programs.”
The Treasury Department lending program was established under the bipartisan CARES act passed and signed into law last year under the Trump administration. The program has been popular but withstood scrutiny last year as data showed that over half of the funding went to larger businesses, including major national chains.
Congress passed another round of funding for the PPP at the end of December, and about half of the funds have been allocated already to businesses who have applied for assistance.
The Biden administration says that it has already taken steps to ensure that smaller, minority-owned and rural businesses receive greater access to assistance through the program.
According to senior administration officials, the share of funding given to businesses with fewer than 10 employees has increased nearly 60 percent; the share given to small businesses in rural areas has increased by nearly 30 percent; and the share distributed through Community Development Financial Institutions and Minority Depository Institutions has increased over 40 percent.
Biden is slated to announce the moves during an event at the White House on Monday afternoon. Separately, he is scheduled to deliver remarks on the 500,000 COVID-19 death toll in the U.S. and participate in a moment of silence and candle-lighting ceremony with Vice President Harris and their spouses later Monday evening.
Businesses can apply for a loan through the PPP until March 31. The administration is not asking lawmakers to extend the program. Officials signaled Sunday they were not opposed to an extension but would leave the decision up to Congress.
Biden’s announcement will come as House lawmakers prepare to vote on his $1.9 trillion coronavirus relief proposal as soon as this week.
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