Biden administration announces reforms to PPP to assist small businesses
The Biden administration announced Monday plans to deliver “equitable relief” to small businesses impacted by the coronavirus outbreak, with a focus on those that may have had difficulty obtaining forgivable loans and minority-owned businesses.
"Today, I’m announcing additional changes to the [Paycheck Protection Program] that will make sure we look out for mom-and-pop businesses even more than we already have," Biden said on Monday.
The White House released a statement saying that it built upon last year’s Paycheck Protection Program. The PPP program, which started a month ago increased funding to businesses with fewer than 10 employees by 60% as well as rural businesses that have experienced a 30% increase.
The statement said that funding that has been distributed through Community Development Financial Institutions and Minority Depository Institutions has also increased by 40%.
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The administration also announced a 14-day period that begins on Wednesday that allows businesses with fewer than 20 employees a chance to sign up for the loans. The administration said that it is not uncommon that these businesses need more time to file the appropriate paperwork. The statement said that self-employed individuals will also have a chance to qualify for more financial support.
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.
"Small businesses are the engine of our economic progress ... but they’re getting crushed," Biden said, adding that approximately 400,000 small businesses have closed since the pandemic began nearly one year ago.
Vice President Kamala Harris and Treasury Secretary Janet Yellen earlier this month spoke at a virtual meeting with officials representing some of the 140 chapters of the Black Chambers of Commerce around the country. The appearance was part of the administration’s ongoing effort to win support for President Joe Biden’s $1.9 trillion coronavirus relief program.
Yellen said the country was set back by the 2008 financial crisis and the long, slow recovery from that economic downturn, with Black unemployment peaking at almost 17% compared to a high of 9.2% for White unemployment during that period.
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“That is what economic crises do,” Yellen said. “They hit people of color harder and longer. ... I am worried that the current crisis will do that again” unless action is taken.
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The Associated Press and Fox News' Evie Fordham contributed to this report.