WASHINGTON (AP) — President Joe Biden is targeting federal pandemic assistance to the nation’s smallest businesses and taking steps to bolster fairness in what’s called the Paycheck Protection Program.
The administration establishes a two-week window, starting Wednesday, during which only businesses with fewer than 20 employees — the overwhelming majority of small businesses — can apply for the forgivable loans. Biden’s team is also spending $1 billion directing to sole proprietors, such as home contractors and beauticians, the majority of whom are owned by women and people of color.
Other efforts will remove the ban on lending to a business that is at least 20% owned by someone arrested or convicted of a non-fraudulent crime in the past year, while allowing those who are behind on their loans federal students to apply for relief through the program. The administration also clarifies that non-citizen legal residents can apply for the program.
The PPP, first rolled out in the early days of the coronavirus pandemic and renewed in December, was intended to help Americans stay employed during the economic downturn. It allows small and medium-sized businesses experiencing revenue loss to access federal loans, which are forgivable if 60% of the loan is for payroll and the balance for other eligible expenses.
The Biden effort aims to address disparities in how the program has been administered by the Trump administration.
Paycheck Protection Program data released Dec. 1 and analyzed by The Associated Press shows that many minority homeowners desperate for a relief loan only received one in the final weeks of the PPP, while many other white business owners were able to obtain loans earlier in the program.
The program, which started April 3 and ended August 8 and provided 5.2 million loans worth $525 billion, has helped many businesses stay on their feet when government measures to control the coronavirus have forced many to close or operate at reduced capacity.
The latest PPP, which began Jan. 11 and ends at the end of March, has already repaid $133.5 billion in loans — about half of the $284 billion allocated by Congress — with an average loan below $74,000. .
A new renewal of the program is not included in Biden’s $1.9 trillion “US bailout package,” which he hopes Congress will pass in the coming weeks.