- President Joe Biden is changing the PPP rules so that only companies with fewer than 20 employees can apply for loans.
- The temporary restriction will last for two weeks starting on Wednesday.
- Biden is expected to formally announce the changes on Monday.
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President Joe Biden will launch changes on Monday in the United States’ main coronavirus aid program for small businesses to try to reach smaller minority-owned companies and sole proprietors left behind in previous aid rounds.
Biden government officials said that for two weeks starting on Wednesday, the Small Business Administration will only accept forgivable loan applications from the Pay Check Protection Program (PPP) from companies with fewer than 20 employees, to ensure that are not hindered by larger companies.
The changes, to be formally announced by Biden on Monday, come at a time when small business bankers say demand for wage protection loans is decreasing as companies reopen.
When the PPP was launched in April 2020, at the height of the coronavirus blockade, under a $ 3 trillion relief account, its initial $ 349 billion was over in two weeks. Congress approved another $ 320 billion in May, but the program expired in August with about $ 130 billion in unused funds.
The program was relaunched on January 19 with $ 284 billion in new funds from a coronavirus aid bill passed in late December, and a Biden government official said that about $ 150 billion in PPP is still available .
But Biden government officials said there are still many minority and very small companies in low-income areas that have been unable to receive aid.
The changes are aimed at making it easier for companies without employees – individual owners, independent contractors and self-employed workers, such as janitors and personal care providers – who could not previously qualify due to deductions for business costs.
The Small Business Administration will revise the rules to suit the approach used to allow small farmers and ranchers to receive aid, the companies said.
Officials said the program would also set aside $ 1 billion for companies without employees in low- and moderate-income areas, 70 percent owned by women and people of color.
The SBA will provide new guidance, making it clear that legal US residents who are not citizens, such as green card holders, cannot be excluded from the program. The Biden administration will also eliminate exclusions that prohibit a business owner in default on student loans from participating in the program.
Business owners with arrests or convictions for crimes unrelated to fraud in the previous year are excluded from the program, but Biden government officials said they will adopt bipartisan Senate proposals to remove this restriction – unless the applicant is currently incarcerated.