The Biden-Harris administration announced several reforms to its latest Paycheck Protection Program (PPP) funding round to target small businesses that were excluded from previous versions of the program.
“Small businesses are the engines of our economic progress; they are the glue, the heart and the soul of our communities. But they get crushed,” Biden wrote in a White House statement.
The revamped funding program will expand much-needed resources to help small businesses survive, reopen and rebuild.
The changes are primarily aimed at helping businesses without employees, such as independent contractors and self-employed people who couldn’t qualify for previous aid due to business cost deductions.
It’s such an important policy. Small business owners I know called me in tears asking for help in keeping their doors open because they couldn’t get PPP loans approved, while large corporations with lawyers and bankers and lobbyists quickly got millions. It levels the playing field. https://t.co/MwAoucxUeg
— Ana Navarro-Cárdenas (@ananavarro) February 22, 2021
From Wednesday, February 24, there will be a two-week period during which only businesses with fewer than 20 employees can apply for assistance under the scheme.
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 ASK #PPP. On Wednesday, February 24, 2021 at 9 a.m. ET, the SBA will establish an exclusive 14-day PPP loan application period for businesses and nonprofits with fewer than 20 employees.#ppploan #stimulus #to lend #small business #sba
— Horsford CPA (@HorsfordCPA) February 23, 2021
The Small Business Administration (SBA) also plans to provide new guidelines clarifying that legal residents of the United States who are not citizens, such as green card holders, cannot be excluded from the program. Green card holders will be able to claim the relief using their individual tax identification number.
The Biden administration has also said it will eliminate exclusions that bar business owners who are delinquent on student loans from receiving the aid.
Currently, PPP loans are not available to any business that is at least 20% owned by an individual that is delinquent or has defaulted within the past seven years on any federal debt, including a student loan.
Another change the Biden administration made to the PPP this week will make it easier for student borrowers who have defaulted or are in default to get forgivable loans for their small businesses through @CNBC through @AnnieReporter https://t.co/hWYZwRQjWL
— Carmen Reinicke (@csreinicke) February 23, 2021
Millions of Americans are in default on their 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 expand access to PPP.
In addition to these changes, the Biden-Harris administration plans to take steps to ensure relief is distributed fairly and in a way that values every taxpayer’s dollar.
The administration revamped the PPP loan application to promote transparency and accountability. Through self-reporting of demographic data, it will be easier to document the impact of the PPP on different segments of the population.
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 applications.
Looking ahead, the administration wants to learn more about current challenges and opportunities in implementing emergency relief programs.
Over the past few weeks, President Biden has met virtually with small business owners and black chambers of commerce to discuss the issues currently facing small businesses and how passing the US bailout will bring relief. critical.
In his statement, Biden talked about his US bailout plan and why it’s so important for Congress to pass it as soon as possible. Biden said he’s open to hearing ideas on how to improve the plan and make it cheaper, but stressed it needs to be clear who is being helped and who can be hurt.
“I always try to help all small businesses in the country, and the families, workers, communities that depend on them to survive, recover and grow,” he concluded.
This article is part of Broke in Philly, a collaborative reporting project between more than 20 news organizations focused on economic mobility in Philadelphia. Read all our stories on breakinphilly.org.