Biden to make it easier for smallest businesses to take out a PPP loan
President Biden announced that his administration is changing the Payment Protection Program, better known as the PPP, in an effort to provide "more equitable access" to applicants, especially those with the smallest of small businesses, as well as those who live in rural communities, and with owners who are women or of color.
Starting Wednesday, for a two-week period, only businesses with 20 employees or fewer will be able to apply for relief through the PPP program, Mr. Biden said in remarks Monday at the White House. Many of these businesses, he noted, had trouble obtaining relief in the early rounds of PPP, which was aimed at helping Americans keep their jobs.
"The way the Paycheck Protection Program was passed, a lot of these mom-and-pop businesses got muscled out of the way bigger by companies who jumped in front of the line," Mr. Biden said of the program, which was initially launched during the Trump administration.
The first iteration of the program began soon after the beginning of the pandemic slowed or brought many U.S. businesses to a halt, from April 3 through August 8. It handed out 5.2 million loans worth a total of $525 billion, helped many businesses stay on their feet, supporting some 51 million jobs.
The latest round of the program, which will end in late March, has paid out $133.5 billion in loans — about half of the $284 billion allocated by Congress — with an average loan under $74,000, the Associated Press noted.
Mr. Biden's $1.9 trillion " American Rescue Plan," does not contain funding for PPP.
But the president promised to give more financial help to sole proprietors, independent contractors, and self-employed individuals, and to change the program to broaden its availability.
Among the changes announced Monday, is the elimination of current restrictions that cut off PPP aid from small business owners with prior non-fraud felony convictions or to those who are delinquent on their student loans.
Mr. Biden also said that his administration's changes to the system would also help improve access for non-citizen small owners who have reached out for PPP assistance, and he referred to these small businesses as the "glue" and "heart and soul" in our communities and of our economy."
The changes, he said, are "a starting point not an ending point," adding, "we need Congress to pass my American Rescue plan" because it would deal with the "immediate crisis facing our small businesses." He pointed out that his plan "targets $50 billion to support the hardest hit small businesses after this program expires at the end of March." Without passage of the legislation, Mr. Biden said these small businesses would "continue to go under."
"Would you leave them out again," he asked, "like the previous administration?"
