WASHINGTON (AP) – President Joe Biden on Monday announced changes to focus more federal pandemic aid on the country’s smallest businesses and businesses owned by women and people of color.
Biden says many of these mom and pop companies were “cleared out” by larger corporations seeking federal money in the early days of the pandemic. He said the changes coming into effect on Wednesday will provide long-overdue assistance to these smaller businesses he believes are “crushed” by the pandemic-driven economic downturn.
“America’s small businesses are in pain, suffering badly, and they need help now,” said Biden.
Under the pandemic-era Paycheck Protection Program, the administration is setting a two-week window, starting on Wednesday, in which only companies with fewer than 20 employees – the vast majority of small businesses – can apply for the forgivable loans.
Biden’s team also frees up $ 1 billion to spend on sole proprietorships such as home contractors and estheticians, the majority of which are owned by women and people of color.
Other efforts will lift a ban on making loans to a company with at least 20% ownership by any person arrested or convicted of a non-fraudulent crime in the previous year, as well as seeking help from those who are behind on their federal student loans. through the program. The administration also clarifies that legal residents of non-residents can apply for the program.
First rolled out in the early days of the coronavirus pandemic and renewed in December, the program was designed to keep Americans working during the economic downturnIt gives small and medium businesses experiencing loss of income access to federal loans, which can be forgiven if 60% of the loan is spent on payroll and the balance on other qualified expenses.
Biden’s effort is aimed at correcting differences in the way the program was managed by the Trump administration.
Data from the Paycheck Protection Program, released Dec. 1 and analyzed by The Associated Press, shows that many minority owners who were desperate for an emergency loan did not get one until after the PPP received a loan in recent weeks, while many more white entrepreneurs could get loans earlier. the program.
The program, which began on April 3 and ended August 8, with 5.2 million loans worth $ 525 billion being distributed, helped many businesses survive as government measures to control the coronavirus forced many to close or close. operate with a reduced capacity.
The latest PPP, which began on January 11 and runs through the end of March, has already disbursed $ 133.5 billion in loans – about half of the $ 284 billion allocated by Congress – with an average loan of less than $ 74,000 .
A further extension of the program is not included in Biden’s $ 1.9 trillion American Rescue Plan, ”Which he hopes Congress will succeed in the coming weeks.