Biden to boost pandemic lending to smaller businesses

WASHINGTON – Calling American small businesses “the engines of our economic progress,” President Joe Biden on Monday announced changes to the payroll protection program that are aimed at helping smaller businesses struggling to stay afloat during the pandemic. coronavirus.


What would you like to know

  • President Joe Biden on Monday announced changes to the payroll protection program aimed at helping smaller businesses struggling to stay afloat during the coronavirus pandemic
  • Biden announced that the federal government will open a two-week window on Wednesday in which only companies with fewer than 20 employees can apply for forgivable loans
  • The president’s team is also allocating $ 1 billion to sole proprietors, such as building contractors and beauticians, the majority of whom are owned by women and people of color.
  • Biden said “family businesses were sidelined by bigger companies that jumped in front of the line” during the Trump administration

Biden announced that the federal government will open a two-week window on Wednesday in which only companies with fewer than 20 employees can apply for forgivable loans.

Biden’s team is also allocating $ 1 billion to sole proprietors, such as building contractors and beauticians, the majority of whom are owned by women and people of color.

Further efforts will remove the ban on lending to a business that is at least 20% owned by someone arrested or convicted of a non-fraudulent crime in the previous year, and allow those who are behind on their student loans federal authorities to request relief through the program. The administration also clarifies that non-citizen legal residents can apply for the program.

Biden said more than 400,000 small businesses closed during the pandemic and millions more are “hanging by a thread.”

“They are the glue and the heart and soul of our communities, but they are crushed,” he said.

“It harms the black, Latin American and Asian communities the most,” Biden added. “Walk down any main street and you see it – empty storefronts, farewell signs hanging on the windows.”

First rolled out in the early days of the coronavirus pandemic and renewed in December, the program was intended to help Americans keep their jobs during the economic downturn. It allows small and medium-sized businesses that experience a loss of income to access federal loans, which are repayable if 60% of the loan is spent on payroll and the remainder on other eligible expenses.

The Biden effort aims to correct disparities in the way the program has been administered by the Trump administration. Biden said that “family businesses have been sidelined by larger companies that have jumped in front of the line.”

Paycheck Protection Program data released on December 1 and analyzed by the Associated Press shows that many minority homeowners desperate for a relief loan only received it in the last few weeks of the P3, while many other homeowners white businesses were able to obtain loans earlier in the program.

“The paycheck protection program is a bipartisan effort,” Biden said. “Democrats and Republicans helped pass it, but Democrats and Republicans have also expressed concerns about its improvement. With their contribution, that’s what we do in our administration – improve it.

“We will make sure every dollar is well spent. These changes will provide long overdue help to small businesses that really need help staying open, keeping jobs and making ends meet.

The program, which began on April 3 and ended on August 8 and granted 5.2 million loans worth $ 525 billion, has helped many businesses stay in business when government measures to controlling the coronavirus have forced many people to shut down or operate at reduced capacity.

The latest PPP, which began Jan. 11 and ends at the end of March, has already disbursed $ 133.5 billion in loans – about half of the $ 284 billion allocated by Congress – with an average loan of less than $ 74,000 .

A new program renewal is not included in Biden’s $ 1.9 trillion US bailout, which he hopes Congress passes in the coming weeks. This package, however, offers $ 50 billion to support the hardest hit small businesses.

Source link

About Emilie Brandow

Avatar

Check Also

Mastercard backs Airtel Africa with minority stake for $ 100 million

April 01, 2021 | Melanie Mingas Mastercard has invested $ 100 million in Airtel Mobile …

Leave a Reply

Your email address will not be published. Required fields are marked *