US President Joe Biden will make changes to the main US coronavirus utility for small businesses on Monday to try to reach smaller, minority, and sole proprietorships left behind in previous rounds of aid.
Biden administration officials said the Small Business Administration will only accept applications for forgiving Paycheck Protection Program (PPP) loans from companies with fewer than 20 employees for two weeks starting Wednesday to ensure they are not crowded out by larger companies.
The changes, which will be formally announced by Biden on Monday, come as small business bankers say demand for Paycheck Protection loans is declining as businesses reopen.
When the PPP launched in April 2020 at the height of the coronavirus blockage under a $ 3 trillion emergency, the initial $ 349 billion was gone within two weeks. Congress approved an additional $ 320 billion in May, but the program ended in August with about $ 130 billion in unused funds.
The program was relaunched on Jan. 19 with $ 284 billion in new funding from a coronavirus relief bill passed in late December, and an official from the Biden administration said that about $ 150 billion in PPP money is still available.
But officials at the Biden administration said there are still many minority and very small businesses in low-income areas that have not been able to receive aid.
The changes are intended to make it easier for businesses with no employees – sole proprietorships, independent contractors, and self-employed people such as cleaning ladies and personal carers – who previously could not qualify due to business expenses deductions.
The Small Business Administration will adapt the rules to the approach used to enable smallholders and ranchers to receive support, the companies said.
The officials said the program will also set aside $ 1 billion for companies without employees in low- and moderate-income areas, which are 70% owned by women and people of color.
The SBA will provide new guidelines making it clear that legal US residents who are not citizens, such as green card holders, cannot be banned from the program. The Biden administration will also eliminate exclusions that prohibit a business owner who is overdue on student loans from participating in the program.
Business owners with arrests or convictions for non-fraud crimes in the previous year have been banned from the program, but officials from the Biden administration said they will pass bipartisan Senate proposals to lift this restriction – unless the applicant is currently incarcerated.