WASHINGTON (AP) – President Joe Biden announced changes on Monday to target more federal pandemic assistance to the country’s smallest businesses and enterprises owned by women and people of color.
Biden says that many of these family businesses “were forced out of the way” by larger companies looking for federal money in the early days of the pandemic. He said the changes that will take effect on Wednesday will provide long-awaited aid to these smaller companies that, he said, are being “overwhelmed” by the economic crisis caused by the pandemic.
“America’s small businesses are suffering, suffering a lot and need help now,” said Biden.
Under the pandemic era Pay Check Protection Program, the government is establishing a two-week window, starting on Wednesday, in which only companies with fewer than 20 employees – the overwhelming majority of small businesses – can join. sign up for forgivable loans.
Biden’s team is also disbursing $ 1 billion to target individual owners, such as 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 by a person arrested or convicted of a non-fraudulent crime in the previous year, as well as allowing arrears on their federal student loans to seek relief through from the program. The administration is also clarifying that legal non-citizens can apply for the program.
First launched in the early days of the coronavirus pandemic and renewed in December, the program was created to help keep Americans employed during the economic crisis. It allows small and medium-sized businesses with lost revenue to access federal loans, which are forgivable if 60% of the loan is spent on payroll and the balance on other eligible expenses.
Biden’s effort aims to correct disparities in the way the program was run by the Trump administration.
Paycheck Protection Program data released on December 1 and analyzed by The Associated Press show that many minority owners desperate for a relief loan did not receive it until the last few weeks of the PPP, while many other business owners Whites managed to obtain loans at the beginning of the program.
The program, which started on April 3 and ended on August 8 and distributed 5.2 million loans worth $ 525 billion, helped many companies stay afloat when government measures to control the coronavirus forced many to close or operate with reduced capacity.
The last PPP, which started on January 11 and runs through the end of March, has already paid out $ 133.5 billion in loans – about half of the $ 284 billion allocated by Congress – with an average loan below $ 74,000. .
An additional program renewal is not included in Biden’s $ 1.9 trillion American Rescue Plan, ”Which he expects Congress to approve in the coming weeks.