The Biden administration on Monday announced that the federal government’s Paycheck Protection Program will be available only to small businesses with fewer than 20 employees during an upcoming two-week period.
The special period, which is slated to start Wednesday, comes after PPP loans last year went to some larger businesses and publicly traded companies, leading to a backlash and returns of the money.
President Joe Biden looks set to talk later Monday about the temporary change to the PPP, which has been a centerpiece of the government’s bipartisan aid efforts for small businesses. He will “make an announcement related to small businesses” around noon Eastern, the White House said in a news release.
The Biden administration is also changing the PPP so small-business owners with non-fraud felony convictions can obtain loans, according to the White House. In addition, officials are opening up the program to business owners who are delinquent on student loans, as well as to those who are non-citizens but legal U.S. residents.
Biden’s $1.9 trillion COVID-19 relief plan doesn’t include new PPP money but instead proposes a new $15 billon grant program for small businesses, while a counter-offer from 10 Republican senators calls for $40 billion for the program. The Democratic-run House and Senate are working toward enacting Biden’s plan without any Republican support.
Small businesses have been hammered by the COVID crisis, with one report saying that most businesses listed on Yelp that closed during the pandemic will stay shut permanently.
While the new administration has “directed significantly more relief to these smallest businesses in this round of PPP than in the prior round, these businesses often struggle more than larger businesses to collect the necessary paperwork and secure relief from a lender,” the White House said in its release. “The 14-day exclusive application period will allow lenders to focus on serving these smallest businesses.”