WASHINGTON (AP) – President Joe Biden announced changes Monday to provide more federal pandemic aid to the country’s smallest businesses and businesses owned by women and people of color.
Biden says many of these mom and pop businesses were “pulled out of the way” in the early days of the pandemic by larger companies looking for federal funds. He said the changes, which go into effect Wednesday, will offer long overdue relief to these smaller businesses, which he says will be “crushed” by the pandemic-induced economic downturn.
“America’s small businesses are suffering, hurting badly, and they need help now,” said Biden.
As part of the pandemic-era paycheck protection program, the administration is setting up a two-week window starting Wednesday during which only companies with fewer than 20 employees – the vast majority of small businesses – can apply for the loans available.
Biden’s team is also donating $ 1 billion to sole proprietorships such as building contractors and beauticians, most of whom are women and black people.
Other efforts will lift a ban on lending to a company with at least 20% ownership by an individual arrested or convicted of a non-fraudulent crime in the previous year and allow those who are in arrears on their federal student loans through the program Get help. The administration also clarifies that legally resident non-nationals can apply for the program.
First introduced in the first days of the coronavirus pandemic and renewed in December, the program should help keep Americans busy during the economic downturn. It enables small and medium-sized businesses that are experiencing lost income to have access to federal loans that are forgivable when 60% of the loan is spent on payroll and the rest on other qualified expenses.
Biden’s efforts are aimed at correcting the differences in how the program is managed from the Trump administration.
Data from the Paycheck Protection Program, released Dec. 1 and analyzed by The Associated Press, shows that many minority owners desperate for an aid loan did not get one until the last few weeks of the PPP, while many more white business owners received one before were able to obtain the program loans.
The program, which began April 3 and ended August 8 and issued $ 5.2 million in loans valued at $ 525 billion, helped many companies stay afloat, as government measures to control the coronavirus did forced to close the plant or to work with reduced capacity.
The most recent PPP, which began Jan. 11 and runs through March, has already disbursed $ 133.5 billion in loans – about half of the $ 284 billion allocated by Congress – with an average loan of under $ 74,000.
A further extension of the program is not included in Biden’s $ 1.9 trillion American Rescue Plan“Which he hopes will pass Congress in the coming weeks.