WASHINGTON () – U.S. President Joe Biden will be making changes to the major U.S. coronavirus small business aid program on Monday to try to reach out to smaller, minority-owned businesses and sole proprietorships left behind in previous rounds of relief.
Biden administration officials said the Small Business Administration will only accept forgivable Paycheck Protection Program (PPP) loan applications from companies with fewer than 20 employees for two weeks beginning Wednesday to ensure they are not crowded out by larger companies .
The changes, which Biden will officially announce on Monday afternoon, come as small business bankers say demand for credit to protect paychecks will wane after businesses reopen. The White House published an information sheet on Monday morning about the changes.
When the PPP was launched in 2020 at the height of the coronavirus lockdown under a $ 3 trillion relief bill, its initial $ 349 billion ran out in two weeks. Congress proved an additional $ 320 billion in May, but the program expired in August with about $ 130 billion in unused funds.
The program restarted on Jan. 19 with $ 284 billion in new funding from a coronavirus relief bill passed in late December, and a Biden administration official said there was around $ 150 billion in PPP funds left .
But Biden government officials said there are still many minority and very small businesses in low-income areas that have not been able to get help.
The changes aim to make it easier for those without employees – sole proprietorships, independent contractors, and self-employed workers such as house cleaners and personal care workers – who previously failed to qualify due to business expense deductions.
The Small Business Administration will revise the rules to align them with the approach to help smallholders and ranchers get help, according to the companies.
Officials said the program will also allocate $ 1 billion to unemployed businesses in low- and middle-income areas, 70% of which are owned by women and colored people.
The SBA will provide new guidance that will make it clear that legal US citizens who are not citizens, such as B. Green Card holders, cannot be excluded from the program. The Biden administration will also remove exclusions prohibiting a business owner who has defaulted on student loans from participating in the program.
Entrepreneurs who were not arrested or convicted of fraud in the previous year are excluded from the program. However, Biden government officials said they would accept proposals from the bipartisan Senate to lift this restriction unless the applicant is currently incarcerated.
According to the White House fact sheet, the Biden administration is also improving program operations by strengthening and streamlining fraud controls, revising lending and government websites that communicate with small businesses, talking more to borrowers about their needs, and the government deepens relationship with lenders.