Accounting for 44 percent of U.S GDP and responsible for employing nearly half of America’s workers, small businesses have had to remain resilient throughout the COVID-19 pandemic for the sake of the U.S economy.
The Paycheck Protection Program (PPP), an economic relief package aimed towards supporting small businesses in response to COVID 19 proved extremely helpful. Since its inception about a year ago, the PPP loans have continuously evolved in order to extend its relief efforts to those people and businesses that may have been left behind.
The Biden-Harris administration has announced several reforms to the PPP loans in order to specifically aid small businesses in need. In doing so, they will extend much needed resources to help small businesses survive, reopen, and rebuild.
One particular group of small businesses that will be more strategically supported by the new PPP reforms will be sole proprietors, independent contractors, and self employed individuals.
These types of businesses, which include home repair contractors, beauticians, and small independent retailers, make up a significant majority of all businesses. Of these businesses, those without employees are 70% owned by women and people of color. Yet many are structurally excluded from the PPP or were approved for as little as $1 because of how PPP loans are calculated .
To address this problem , the Biden-Harris administration will revise the loan calculation formula for these applicants so that it offers more relief, and establish a $1billion set aside for businesses in this category without employees located in low and moderate income (LMI) areas