WASHINGTON (AP) – President Joe Biden announced changes on Monday to target more federal pandemic assistance to the country’s smallest businesses and businesses owned by women and people of color.
Biden says many of these mothers and pop-businesses “got out of the way” by larger companies seeking federal money in the early days of the pandemic. He said the changes, which come into force on Wednesday, will provide long-delayed aid to these smaller businesses, which he says are “crushed” by the pandemic economic crisis.
“Small businesses in America are suffering, suffering severely and needing help now,” Biden said.
Under the Pandemic Wage Protection Program, the administration is setting a two-week window, starting Wednesday, in which only companies with less than 20 employees – the vast majority of small businesses – can apply for forgivable loans.
Biden’s team also makes $ 1 billion to target sole proprietors, such as entrepreneurs and beauticians, most of whom are owned by women and people of color.
Other efforts will remove the ban on lending to a company with at least 20% ownership by a person arrested or convicted of a non-fraud offense in the previous year, as well as allowing those behind their federal student loans to seek help under program. The administration also clarifies that non-citizen legal residents can apply to the program.
It was first released in the early days of the coronavirus pandemic and renewed in December, the program was designed to help keep Americans employed during the economic downturn.. It allows small and medium-sized businesses that suffer loss of income to access federal loans, which are forgivable if 60% of the loan is spent on payroll and the balance on other qualified expenses.
The Biden effort aims to correct disparities in the way the program has been administered by the Trump administration.
Data from the Wage Protection Program published on December 1 and analyzed by The Associated Press show that many minority homeowners desperate for an aid loan did not receive PPPs until the last weeks, while many other white business owners were able to obtain loans earlier in the program.
The program, which began on April 3 and ended on August 8 and provided $ 5.2 billion in loans worth $ 525 billion, has helped many companies stay afloat when government measures to control coronavirus and -forced many to close or operate at low capacity.
The most recent PPP, which began Jan. 11 and runs through the end of March, has already paid $ 133.5 billion in loans – about half of the $ 284 billion allocated by Congress – with an average loan below $ 74,000.
A new program renewal is not included in Biden’s $ 1.9 trillion American Rescue Plan“He hopes Congress will pass in the coming weeks.