Washington on Monday announced changes to the federal government’s signature coronavirus-relief program for small businesses, in an effort to assist very small companies and those owned by minorities or located in underserved communities to gain access to the program.
As part of the changes, the Small Business Administration will accept applications for the Paycheck Protection Program exclusively from companies with fewer than 20 employees for 14 days beginning this Wednesday, February 24th. About 400,000 small businesses have closed amid the coronavirus pandemic due primarily to the mandated shutdowns. Though the Paycheck Protection Program provided some relief to many, “a lot of these mom-and-pop businesses got muscled out of the way by bigger companies who jumped in front of the line,” Biden said.
The PPP, which offers forgivable loans to small businesses to help them survive the economic impacts of mandated closures provides forgivable loans which are issued by lenders and backed by the SBA. The changes enacted this week, “will make sure we look out for the mom-and-pop businesses even more than we already have,” Mr. Biden said.
PPP applicants with fewer than 20 employees will be able to apply exclusively from 9 a.m. ET on Wednesday until 5 p.m. ET on March 9, an administration official said. In order to reach the smallest businesses, SBA will offer PPP loans to businesses with 20 or less employees and sole proprietors only from Wednesday, February 24 through Wednesday, March 10, 2021. President Biden has also announced additional program changes to make access to PPP loans more equitable.
The Paycheck Protection Program (PPP) provides loans to help businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. Borrowers may be eligible for PPP loan forgiveness.
Other planned changes include allowing broader access to the program for applicants with non-fraud felony convictions, aligning with a bipartisan proposal from Sens. James Lankford (R., Okla.), Rob Portman (R., Ohio), Ben Cardin (D., Md.), and Cory Booker (D., N.J.). The administration official said the SBA will also work with the Treasury and Education Departments so that borrowers who have recently defaulted or are delinquent on federal student-loan payments wouldn’t be blocked from receiving PPP loans.
Congress provided $284 billion for the newest round of PPP, as part of its coronavirus relief package passed in December. As of Feb. 21, less than half those funds were exhausted, according to agency data, as the SBA had approved about $140.3 billion in loans since the program’s reopening on Jan. 11.
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