Biden announces PPP changes designed to help underserved borrowers
President Joe Biden on Monday (2/22/2021) announced a series of changes to the Paycheck Protection Program designed to make the program more accessible to underserved borrowers, including a two-week period during which only businesses with fewer than 20 employees can apply for loans.
The effort builds on several recent changes and comes after criticisms that the program’s $659 billion first round last year benefited larger, more affluent and connected businesses at the expense of the disadvantaged businesses for which it was designed.
The five changes announced Monday:
- Starting Wednesday, only businesses with fewer than 20 employees can apply for loans for a two-week period.
- The way loans are calculated will be revised so businesses without employees get more relief. The previous calculation — based on payroll — made the program ineffective for sole proprietors and independent contractors, including many businesses of color. The Biden administration also will set aside $1 billion in PPP loan funds for businesses without employees in low- and moderate-income areas.
- The elimination of an exclusion that prevents business owners with non-fraud felony convictions from accessing the program.
- The elimination of an exclusion that prevents business owners who are delinquent on federal students loans from accessing the program.
- Non-citizen small-business owners who are lawful U.S. residents will be able to apply for loans using individual taxpayer identification numbers.