US president Joe Biden COURTESY
Aiming to help the smallest American businesses that have been overlooked amid the coronavirus pandemic, president Joe Biden unveiled reforms to a vital aid program on Monday.
The Paycheck Protection Program (PPP) has been a key lifeline to businesses during the COVID-19 crisis, but the smallest among them, those least likely to have relationships with banks, often missed out. "America's small businesses are hurting, and hurting badly, and they need help now," Biden said in an announcement at the White House. "When the Paycheck Protection Program was passed, a lot of these mom-and-pop businesses just got muscled out of the way, by bigger companies who jumped in front of the line."
He said the government will open a two-week window starting on Wednesday during which only firms and non-profit groups with fewer than 20 employees will be able to apply for relief. That 14-day period will give banks and lenders time to target the 98 per cent of the smallest businesses that fall in that category to receive loans, which in most cases are forgiven. Many of those are owned by women and people of color, especially shops where the owner is the sole employee.
Biden said 400,000 small businesses have closed their doors since the coronavirus crisis erupted roughly a year ago. "Small businesses are the engines of our economic progress; they're the glue and the heart and soul of our communities. But they're getting crushed," he said.These businesses often struggle more than larger businesses to collect the necessary paperwork and secure relief from a lender, he noted.
The changes also will alter the PPP to ensure that sole proprietorships can receive sufficient aid, and remove restrictions on loans for business owners who either have a criminal record in the past year or are delinquent on federal student loan payments. It also will reform the program to provide funding to legal immigrants.