The U.S. Treasury Department on Monday made five changes to the Paycheck Protection Program to enable minority-owned and very small businesses to access loans needed to weather the coronavirus pandemic’s economic impact.
One change will allow self-employed, sole proprietors and independent contractors to qualify for more money. Previously, most were excluded or received minimum funding because loan amounts were based on the number of employees.
Another change comes on Wednesday when businesses with fewer than 20 employees will have an exclusive two-week period to apply for funding.
“Small businesses are the engines of our economic progress. They’re the glue, and the heart and soul, of our communities,” Biden said at a White House event. The updates ensure “we look out for the mom-and-pop businesses even more than we have,” he added.
In three other eligibility changes, small business owners with student loan debt can now apply for and receive PPP aid. And non-citizens who are legally a U.S. resident can also apply for a PPP loan. The final change eliminates the restriction that bars small business owners with non-fraud-related felonies from receiving PPP funding. Current guidelines prohibit an owner who has had an arrest or felony conviction relating to financial fraud in the past five years, or any other felony within the prior year, from receiving any aid. While the restriction for those with a financial fraud felony conviction would still remain, the mandate that covers “any other felony” to determine eligibility will now be removed.
The current funding round expires on March 31, and the Biden administration has not said yet whether the program would be extended. In December, the program received $284 billion as part of the $900 billion Covid-19 relief package. The funding allowed the program to be reopened to both borrowers and lenders on Jan. 11. If Biden’s $1.9 trillion rescue plan is approved by the end of this week, another $7 billion could go into the program.
“This is a starting point, not the ending point,” Biden said. “We need Congress to pass my American Rescue Plan.”
