WASHINGTON – President Joe Biden announced changes Monday to target more federal pandemic assistance to the country's smallest businesses and ventures owned by women and people of color.
Biden says a lot of these mom-and-pop businesses “got muscled out of the way” by larger businesses seeking federal money in the early days of the pandemic. He said changes taking effect Wednesday will provide long-overdue aid to these smaller enterprises that he says are being “crushed” by the pandemic-driven economic downturn.
“America's small businesses are hurting, hurting badly and they need help now,” Biden said.
Under the pandemic-era Paycheck Protection Program, the administration is establishing a two-week window, starting Wednesday, in which only businesses with less than 20 employees – the overwhelming majority of small businesses – can apply for the forgivable loans.
Biden's team is also carving out $1 billion to direct toward sole proprietors, such as home contractors and beauticians, the majority of which are owned by women and people of color.
Other efforts will remove a prohibition on lending to a company with at least 20% ownership by a person arrested or convicted for a non-fraud felony in the prior year, as well as allowing those behind on their federal student loans to seek relief through the program. The administration is also clarifying that noncitizen legal residents can apply to the program.
First rolled out in the earliest days of the novel coronavirus pandemic and renewed in December, the program was meant to help keep Americans employed during the economic downturn. It allows small and midsize businesses suffering loss of revenue to access federal loans, which are forgivable if 60% of the loan is spent on payroll and the balance on other qualified expenses.
The Biden effort is aimed at correcting disparities in how the program was administered by the Trump administration.