Biden announces changes in loan program aimed at aiding small and minority-owned businesses
Biden had previously criticized the loan program for having helped larger businesses with existing banking relationships while many smaller businesses struggled to get relief.
Feb. 22, 2021, 11:00 AM CET / Updated Feb. 22, 2021, 6:41 PM CET
By Shannon Pettypiece
WASHINGTON — President Joe Biden announced changes Monday to the Paycheck Protection Program aimed at ensuring more small and minority-owned business are able to qualify for federal assistance as a result of the economic turmoil caused by the coronavirus pandemic.
The changes are intended to facilitate loans for contractors and self-employed people, noncitizens who are lawful U.S. residents and business owners with previous nonfraud convictions, Biden said. It will also open a 14-day window starting March 9 for businesses with fewer than 20 employees to apply for relief.
Biden had previously criticized the small-business loan program, which was started during the Trump administration, for having helped larger businesses with existing banking relationships while smaller businesses struggled to obtain relief. The changes are aimed specifically at helping minority-, woman- and veteran-owned businesses, as well as those in rural areas, administration officials said.
"When the Paycheck Protection Program was passed, a lot of these mom-and-pop businesses got muscled out of the way by bigger companies who jumped in front of the line," Biden said.
Biden administration officials have cautioned that the pandemic, which has crippled many small businesses, is months from being over. At least 400,000 small businesses have closed permanently, Biden said.
"Small businesses are the engine of our economic progress, they are the glue in the heart and soul of our community, but they are getting crushed," Biden said.
Biden has pledged that every American who wants to be vaccinated will be able to do so by the end of July, but getting those shots into arms could take time, and a number of variables remain about the vaccines' effectiveness among new strains and how widely they will be adopted. Some businesses could be unable to return to some sense of normal well beyond the summer.
The Paycheck Protection Program reopened a month ago with new fraud protections and a focus on getting aid to smaller businesses that weren't able to get assistance previously, particularly Black- and Latino-owned businesses. Since then, administration officials have said that the share of funding going to businesses with fewer than 10 employees is up by almost 60 percent and that the share of funding going to small businesses in rural areas is up by nearly 30 percent.
Biden is also seeking additional funding from Congress to help small businesses, including $15 billion in grants for the hardest-hit businesses and $35 billion for small-business lending programs.
Just about half of the $285 billion Congress allocated for the program has been directed to businesses, administration officials said. The program is set to end March 31.