Biden Temporarily Limits PPP Loans to Smallest Businesses
For two weeks, PPP loan applications will be limited to businesses with 20 or fewer employees.
The Biden-Harris administration announced that starting Wednesday, only businesses with fewer than 20 employees can apply for a Paycheck Protection Program loan.
Biden said that the PPP application restrictions, which will last for 14 days, are intended to aid the smallest businesses and “those that have been left behind in previous relief efforts.”
Ninety-eight percent of small businesses have fewer than 20 employees.
“While these efforts are no substitute for passage of the American Rescue Plan,” Biden’s stimulus package, “they will extend much-needed resources to help small businesses survive, reopen, and rebuild,” Biden said in a statement.
Businesses with fewer than 20 employees “often struggle more than larger businesses to collect the necessary paperwork and secure relief from a lender,” Biden said.
The 14-day exclusive application period will allow lenders to focus on serving these smallest businesses.
Revise the loan calculation formula for sole proprietor, self-employed and independent contractor applicants so that it offers more relief, and establish a $1 billion set-aside for businesses in this category without employees located in low- and moderate-income (LMI) areas.
Consistent with a bipartisan bill, eliminate a restriction that bars small-business owners with prior non-fraud felony convictions from the PPP.
Eliminate the ban on PPP loans for small-business owners who are delinquent on their federal student loans. Currently, the PPP is not available to any business with at least 20% ownership by an individual who is currently delinquent or has defaulted within the last seven years on a federal debt, including a student loan.
Ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Numbers (ITINs) to apply for relief.
(Photo: Bloomberg)