President Joe Biden announced changes to the federal program on February 22 that are aimed at helping small businesses survive the COVID-19 pandemic.
The Small Business Administration will establish a 14-day period during which only businesses and nonprofits with fewer than 20 employees can apply for Paycheck Protection Program (PPP) loans. The period will begin on February 24.
Larger companies will be able to apply for loans after the period ends, until the program expires on March 31.
The Biden administration will also remove a restriction on granting loans to small business owners who were previously convicted of felonies and homeowners who have been labeled delinquent for defaulting on student loans.
Two other changes were announced; Sole proprietors, independent contractors, and the self-employed can access higher loan amounts through a review of the APP funding formula, and non-citizens who are legal residents can apply for loans using their Individual Taxpayer Identification Number.
Biden said that approximately 400,000 small businesses closed during the pandemic, « and millions more are hanging by a thread. »
“Walk down any main street and you will see it: empty storefronts, goodbye posters hanging in the windows. Maybe it’s the pizza place that you used to take your family out to dinner, or the hardware store that always had the tool you needed. It is a family store sponsored by, that has the support of the community and, in turn, they support the community. They sponsor a Little League team; the hair salon with the first dollar bill he ever won is still taped to the wall, along with a photo of the kids now in college, « he said.
Jeff Kasper, a manager at Legacy Toys, prepares a box for shipment at the Mall of America store in Bloomington, Minnesota on June 16, 2020 (Kerem Yucel / . via .).
Biden described the « family » stores as the backbone of the business community, but said the store owners were « pushed aside by big business » seeking loans from the federal government.
I want to be clear. The Paycheck Protection Program is a bipartisan effort; Democrats and Republicans helped pass it. But Democrats and Republicans have also raised concerns about improving it. With your contribution, that is what we are doing in our administration: improve it, ”he said.
Congress added more than $ 284 billion to the PPP in December 2020 with its latest COVID-19 aid package, setting aside about $ 60 billion for businesses with 10 or fewer employees. The bill also increased maximum loan amounts and restricted second drafts for companies with 300 or fewer employees, with a few exceptions.
The changes to the program announced on February 22 had support from both sides of the aisle.
« Glad to see the Biden [administration] opening up dollars / PPP loans to small businesses and others that continue to be so negatively impacted by COVID. It is possible to continue with this more calculated aid / assistance approach, and not massive bills that have little to do with COVID, ”said Rep. Rick Crawford (R-Ark.) Wrote on Twitter.
« These changes ensure our worst-hit small business owners can access PPPs and don’t miss out on this critical funding. » wrote Representative Brenda Lawrence (D-Mich.).