Biden directs PPP loans to smaller businesses
The Biden administration has announced some adjustments to the Paycheck Protection Program (PPP) intended to improve access to forgivable loans for family businesses.
The Small Business Administration will soon be accepting PPP loan applications exclusively from businesses and associations with fewer than 20 employees, for a period of 14 days. The SBA says the share of program funding going to companies with fewer than 10 employees is up nearly 60% from the same point in the program last year. But the Biden administration wants to target the PPP more on smaller companies. The 14-day period will begin on Wednesday February 24, 2021 at 9:00 a.m.
The SBA will also allow sole proprietors, independent contractors and self-employed workers to receive greater financial support. These types of businesses, which include home repair contractors and small independent retailers, make up a significant portion of all businesses. The SBA will revise the P3 formula for these applicants to provide more relief.
The SBA is removing the restriction that prevents small business owners behind on their federal student loans from getting a P3 loan. Currently, the P3 is not available to any business that is 20% or more owned by someone who is currently in or has defaulted in the past seven years on federal debt, including a student loan.
The agency will also remove the restriction that prevents small business owners who have previously been convicted of non-fraudulent crimes from obtaining a PPP loan – a move with broad bipartisan support. The SBA also clarified that small business owners who are not U.S. citizens, but are legal residents of the United States, can use their individual tax identification number to apply for a loan. These changes will be implemented by the first week of March.
Congress provided $ 284 billion for the latest round of PPP loans under the coronavirus relief plan adopted in December. As of February 18, less than half of these funds had been used.