Small Business Finance News
More PPP Help For Small Business On The Way
Written by Ken Gaebler
Minority-owned and very small businesses have been given preferential access to Paycheck Protection Program relief for the next two weeks. The application period opens on October 24, 2021.
The Biden administration announced numerous changes to the Paycheck Protection Program (PPP) this week to ensure that bigger businesses don't monopolize relief funding at the expense of smaller companies, a phenomenon that occurred during the Trump administration's oversight of the program.
The changes are good news for business owns who previously missed out on getting coronavirus pandemic relief loans.
To qualify for the early application period, a business must have fewer than twenty employees.
Individuals who are self-employed, sole proprietors or independent contractors are also eligible for the new funds. Previously, they were either not eligible or may have received very little money, as low as a single dollar in some cases, based on how the initial program was structured.
Numerous other exclusions that were in place during PPP's initial rollout have been removed. Notably, business owners with non-fraud felony records and those with delinquent federal student loans are now eligible.
"These vital reforms will expand access to the Paycheck Protection Program to the hardest-hit businesses that anchor our low and middle-income and communities of color," said House Speaker Nancy Pelosi. "Importantly, they will ensure that sole proprietors, which are overwhelmingly women and minority-owned and also serve our immigrant communities, are not left behind."
The PPP, a forgivable loan program, was created by Congress last March to help business owners who were adversely impacted by the pandemic. Funds were distributed, and the program ended in August. Congress then extended the program in December, granting additional funding for loans and specifically carving out $12 billion in relief loans for minority-owned businesses.
According to government records, 1.8 million small business owners have received relief loans to date, with total lending amounting to almost $134 billion.
Congress is currently considering adding more funding for relief loans. A Democratic-backed relief bill aims to add $7 billion to the program.
In a public announcement yesterday, the Biden administration cited its progress in getting pandemic relief to business owners that were previously unable to get PPC loans or other relief.
They noted that the share of funding going to small businesses with fewer than ten employees is up nearly 60 percent as compared to the same time last year. Funding funding going to small businesses in rural areas is up nearly 30 percent over the same time period.
The Biden administration also announced numerous new protections to limit PPP loan fraud, which was prevalent in the initial rollout.
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