Biden Set To Change PPP, Giving Small Businesses With Fewer Than 20 Employees Priority
The Biden Administration is trying to avoid the mistakes of the Trump Administration in its latest round of pandemic relief funding for the Paycheck Protection Program (PPP). President Joe Biden announced changes to the program that are intended to reach more tiny, underserved and minority-owned businesses, according to the Wall Street Journal (WSJ).
Biden has criticized the prior administration’s rollout of the PPP. The U.S. Treasury Department said the Small Business Administration will allow businesses with 20 or fewer employees to apply for PPP funding starting two weeks earlier than larger businesses, beginning on Wednesday, Feb. 24.
“When the Paycheck Protection Program was passed a lot of these mom-and-pop businesses got muscled out of the way by bigger companies that jumped in front of the line,” Biden said during a press conference.
The PPP was created by the Trump administration to help businesses survive through the coronavirus pandemic and buffer them against having to do massive layoffs. The loans, which came with an interest rate of 1 percent, could eventually become forgivable.
However, during the first two rounds of funding, many small and Black-owned businesses said they were shut out of the program.
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“I was excited about it at first, but as time went on, I just feel like it’s just a hoax and it’s going to be difficult for us,” Vania Bredy, co-founder of Bredy Physical Therapy, told Moguldom in April 2020. “I don’t know anyone who’s gotten any funds in their account and I know at least 10 different healthcare providers that tried to apply.”
Biden said the current adjustments will be implemented to ensure the program “looks out for mom-and-pop businesses even more than it already has.” There will also be new rules implemented in how loan amounts are calculated for independent contractors and self-employed workers. Applicants with non-fraud felony convictions will have wider access, and $1 billion in funding will be set aside for business owners with no employees in low-to-moderate income communities.