Biden reforming PPP to target overlooked small businesses

People walk past a business that is closing following the outbreak of the coronavirus disease (Covid-19) in the Manhattan borough of New York City, New York, US, August 17, 2020. — Reuters pic
People walk past a business that is closing following the outbreak of the coronavirus disease (Covid-19) in the Manhattan borough of New York City, New York, US, August 17, 2020. — Reuters pic

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WASHINGTON, Feb 22 — Aiming to help the smallest businesses that have been overlooked amid the pandemic, US President Joe Biden wasdue to unveil reforms to a vital aid program today.

The Paycheck Protection Program (PPP) has been a key lifeline to businesses amid the Covid-19 crisis, but the smallest among them, those least likely to have relationships with banks, often missed out.

The government will open a two-week window starting on Wednesday where only firms with less than 20 employees will be able to apply for relief, the White House announced.

That 14-day period will give banks and lenders to target the 98 per cent of the smallest businesses that fall in that category, to receive loans that in most cases are forgiven.

“They are Main Street businesses that anchor our neighborhoods and help families build wealth,” the White House said in a statement, noting that “these businesses often struggle more than larger businesses to collect the necessary paperwork and secure relief from a lender.”

Many of those are owned by women and people of colour, especially shops where the owner is the sole employee.

Biden is due to hold an event at the White House to announce the changes later today.

The changes also will alter the PPP to ensure sole-proprietorships can receive sufficient aid, remove restrictions on loans for business owners who have a criminal record in the past year, or who are delinquent on federal student loan payments.

He also will reform the program to provide funding to legal immigrants.

The Small Business Administration (SBA) that administers the PPP said earlier this month that the program has approved US$103 billion in loans to more than 1.4 million small businesses, with 82 per cent of all loans going to businesses requesting less than US$100,000.

The aid program was approved in late March 2020 as part of the US$2.2 trillion CARES Act that aimed to help firms forced to shut down or that saw earnings collapse. — AFP

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