Biden Reforms to Paycheck Protection Program Advantage Smallest Businesses
On February 22, the Biden Administration announced changes to the Paycheck Protection Program (PPP) designed to deepen the program’s ability to reach very small businesses and businesses located in low- and moderate-income communities.
OFN commends the Biden Administration for prioritizing the needs of businesses that have struggled to access PPP loans. CDFIs continue to be integral in reaching minority-owned, women-owned, and other underserved businesses — during this round of PPP, the share of funding distributed through CDFIs and Minority Depository Institutions (MDIs) is up more than 40 percent.
The Biden Administration seeks to further improve access to PPP through several programmatic changes, including:
- A two-week window (February 24-March 9) of dedicated access to the PPP loan system for businesses with fewer than 20 employees. During that period, the SBA will only process applications from those very small businesses.
- $1 billion set aside for businesses with employees located in low- and moderate-income areas.
- Changes to income calculations for sole proprietors, independent contractors, and self-employed people to allow these businesses to receive more financial support.
- Easing restrictions on borrowers with non-fraud felony convictions, delinquent student loan debt, and Individual Taxpayer Identification Number (ITIN) holders.
Small businesses have until March 31 to apply for a PPP loan unless Congress approves an extension of the program. The $1.9 trillion COVID relief bill being negotiated in Congress currently does not include an extension of the deadline for new PPP applications. OFN will continue to work with Congress and the Biden Administration to ensure equitable access to PPP loans.
For more information on OFN’s PPP advocacy, contact Dafina Williams, SVP, Public Policy.