WASHINGTON (AP) – President Joe Biden on Monday announced changes to target more federal pandemic assistance to the nation’s smallest businesses and businesses owned by women and people of color.
Biden says many of these mother and pop companies were “out of the way” by larger companies seeking federal money in the early days of the pandemic. He said the changes that will take effect on Wednesday will provide much-anticipated help to those smaller businesses that he says are being “crushed” by the pandemic-driven economic recession.
“Small American businesses are hurting, hurting, and needing help now,” Biden said.
Under the Pandemic-era Check Protection Program, the administration is establishing a two-week window, starting Wednesday, in which only companies with less than 20 employees (the overwhelming majority of small businesses) can apply for forgivable loans.
The Biden team is also handing out $ 1 billion to target exclusive owners, such as home contractors 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 of a person arrested or convicted of a crime without fraud the previous year, as well as allowing those with federal student loans to apply for assistance through of the program. The administration also clarifies that non-citizen legal residents can apply for the program.
It first unfolded in the early days of the coronavirus pandemic and renewed in December, the program was intended to help keep Americans busy during the economic downturn. It allows small and medium-sized businesses that suffer loss of income to access federal loans, which can be forgiven if 60% of the loan is spent on payroll and the balance on other qualifying expenses.
Biden’s effort aims to correct disparities in the way the program is administered by the Trump administration.
Data from the Check Protection Program released on December 1 and analyzed by The Associated Press show that many minority homeowners desperate for a relief loan did not receive it until the final weeks of the PPP, while many more entrepreneurs whites were able to obtain loans before the program.
The program, which began on April 3 and ended on August 8 and provided $ 5.2 billion in loans worth $ 525 billion, helped many companies stay in the fleet when the government measures to control the coronavirus forced many to shut down or operate at a diminished capacity.
The latest PPP, which began Jan. 11 and runs through late March, has already paid off $ 133.5 billion in loans, about half of the $ 284 billion allocated by Congress, with an average loan of less than $ 74,000 .
A new program overhaul is not included in Biden’s $ 1.9 trillion American Rescue Plan“, Which he expects Congress to approve in the coming weeks.