The Biden-Harris administration increased lending to small businesses through the Paycheck Protection Program, or PPP. During White House remarks, President Biden said that starting Wednesday, February 24th, small businesses with fewer than 20 employees can apply here to see if they are eligible.
If the loans are used for business expenses such as payroll, rent, utilities, and insurance, the loan could be forgiven. For more information about the loan forgiveness eligibility, go to SBA.gov.
Small businesses with less than 20 employees account for 98% of small businesses. They are the anchor of neighborhoods and communities and it is important that they get back on their feet. Since the start of the COVID-19 pandemic, small businesses, especially Black- and Brown-owned small businesses, have been struggling to make ends meet, resulting in a massive economic crisis.
President Biden is making a sustained effort to work with lenders to help small businesses take advantage of the exclusive window and gather the appropriate paperwork.
This second round of relief is a significant improvement on the first attempt at helping these small business owners. The improvements made in this second round also loosen up eligibility requirements including allowing small businesses with non-fraud related felonies, those delinquent on federal student loans, and Green Card holders, to apply.
“Approximately 400,000 small businesses have closed since the pandemic began nearly one year ago,” said President Biden. “[It is time to] make sure we look out for the mom-and-pop businesses more than we ever have.”
Biden is blocking bigger businesses from applying to give small businesses an advantage when filling out the complex paperwork. During the first round of PPP, small businesses struggled to take advantage of the lending program.
Last summer, financial tech companies like Kabbage participated directly, as PPP partner lenders, to help small businesses take advantage of the first round of PPP benefits. Rob Frohwein, CEO of Kabbage, told Fortune, “[The Kabbage application platform] helps streamline the process, which can be confusing or challenging if you don’t have a lot of familiarity with tax documentation.” This was in response to Uber drivers taking advantage of the first round of PPP benefits, prior to this new round of benefits.
While the program has not been perfect in the past, it aims to help small businesses survive, reopen, and rebuild so that the economy can end its current recession. The funding for the relief program is not included in the $1.9 trillion “American Rescue Plan” currently up for a vote this Friday. This financial aid package should also provide an economic boost and further help small businesses increase revenue.