Feb. 22 (UPI) — The Biden administration announced changes Monday designed to prop up small businesses in the United States that continue to be hindered by the COVID-19 pandemic, particularly those owned by people of color.
Chief among the changes is the start of a two-week window, during which only businesses with fewer than 20 employees can apply for aid through the Paycheck Protection Program — the federal program created a year ago at the start of the crisis.
“These businesses often struggle more than larger businesses to collect the necessary paperwork and secure relief from a lender,” the White House said in a statement Monday. “The 14-day exclusive application period will allow lenders to focus on serving these smallest businesses.
“The Biden-Harris administration will also make a sustained effort to work with lenders and small business owners to ensure small businesses take maximum advantage of this two-week window.”
The two-week period, which begins on Wednesday, will not be available to larger businesses. It is designed to give small businesses the first chance at the federal aid to avoid the problems that occurred when it was created last year by the CARES Act.
“Small businesses account for 44% of U.S. gross domestic product, create two-thirds of net new jobs, and employ nearly half of America’s workers,” the White House added. “Now, millions of main street small businesses — especially Black- and Brown-owned small businesses — are struggling.”
The government under former President Donald Trump was criticized last year after it became known that several major corporations — including the NBA’s Los Angeles Lakers, Shake Shack and Nathan’s Famous — applied for and received funds from the program, which is designed primarily as a remedy for small businesses with smaller payrolls.
The Trump administration was also criticized for paying out loans to businesses linked to politicians, including White House press secretary Kayleigh McEnany and Reps. Susie Lee, Debbie Mucarsel-Powell, Roger Williams and Vicky Hartzler.
Small businesses were awarded $134 billion in the latest round of PPP funding. The loans are forgiven if at least 60% of them are used for payroll expenses like wages, salaries and group health insurance.
Monday’s changes also include provisions to help sole proprietors and self-employed workers, lift a restriction that bars PPP aid for business owners with prior non-fraud felony convictions and end a restriction that barred loans from going to owners with federal student loan delinquency.
The plan also improves access for noncitizens who are legal residents of the United States.
Additionally, the White House said the strategy includes close monitoring and transparency to mitigate wasteful spending and promote accountability.