The Biden administration on Monday announced changes to the Paycheck Protection Program (PPP) that will alter how the federal coronavirus relief loans for businesses are disbursed.
The modifications are designed to help the “smallest businesses and those that have been left behind in previous relief efforts,” according to a statement from the White House. They target “equitable relief,” the administration said, with a special focus on Black- and brown-owned small businesses.
The changes include:
- Implementing a two-week period, starting Wednesday, during which only businesses with fewer than 20 employees can apply for PPP funding;
- Revising the loan calculation formula to increase funding access for sole proprietors, independent contractors and people who are self-employed;
- Removing restrictions that prevent small business owners with non-fraud felony convictions from receiving PPP funding;
- Eliminating rules that prohibit small business owners who are behind on federal student loans from receiving PPP loans;
- Allowing non-citizen business owners who are legal U.S. residents to apply for funding.
The announcement comes five weeks before the March 31 deadline for the current round of loans. Some lenders say the move has added uncertainty to the lending process, The New York Times reports.
The Paycheck Protection Program was a centerpiece of the first wave of coronavirus relief funding passed last spring by the Trump administration. Congress approved additional funding through the program in December.
To date, nearly 7.1 million loans worth more almost $662 billion have been approved through the program, according to Small Business Administration data.