The feds will give America’s smallest businesses two weeks to access coronavirus relief loans without larger companies gumming up the works.
Only firms with fewer than 20 employees will be able to apply for forgivable loans through the Paycheck Protection Program for 14 days starting Wednesday, the White House said.
The move is among several steps the Biden administration announced Monday to help cash-strapped small businesses — particularly those owned by people of color — access the $284 billion aid package as the COVID-19 crisis continues.
While the feds have already narrowed the criteria for who can access the latest round of so-called PPP funds, White House officials say they want to streamline the process for the small businesses that employ nearly half of the nation’s workers.
Businesses with fewer than 20 employees “often struggle more than larger businesses to collect the necessary paperwork and secure relief from a lender,” the White House said in a fact sheet outlining the latest changes. “The 14-day exclusive application period will allow lenders to focus on serving these smallest businesses.”
The feds will also revise the formula used to calculate PPP loans for sole proprietors, independent contractors and self-employed people, some of whom were approved for as little as $1 under previous rounds of the program, officials said.
The Biden administration will set aside $1 billion for those kinds of businesses, which include beauticians, home repair contractors and independent retailers, according to the fact sheet.
And officials said they’ll work to expand access to the program by eliminating restrictions that prevented loans from going to green card holders, people who are delinquent on federal student loans, or those who have been recently arrested or convicted for felonies that aren’t related to financial fraud unless the applicant is currently incarcerated.
As of last week, the Small Business Administration said it had doled out some 6.8 million PPP loans worth $648 billion since the program’s inception last spring.
That includes 1.6 million loans worth nearly $126 billion that have been approved since January, more than 70 percent of which were for $50,000 or less, officials have said.