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Mon Feb 22, 2021, 08:56 AM

Biden to make it easier for smallest businesses to take out a PPP loan

UPDATED ON: FEBRUARY 22, 2021 / 8:12 AM / AP

President Joe Biden is targeting federal pandemic assistance to the nation's smallest businesses and taking steps to further equity in the Paycheck Protection Program, a pandemic-relief program created last year. Many of these businesses are owned by women and people of color, who experienced delays in receiving the loans in the program's initial rollout.

The administration is establishing a two-week window, starting on Wednesday, in which only businesses with fewer than 20 employees the overwhelming majority of small businesses can apply for the forgivable loans. Biden's team is also carving out $1 billion to direct toward sole proprietors, such as home contractors and beauticians, the majority of which are owned by women and people of color.

Other efforts will remove a prohibition on lending to a company with at least 20% ownership by a person arrested or convicted for a nonfraud felony in the prior year, as well as allowing those behind on their federal student loans to seek relief through the program. The administration is also clarifying that noncitizen legal residents can apply to the program.

The PPP, first rolled out in the earliest days of the coronavirus pandemic and renewed in December, was meant to help keep Americans employed during the economic downturn. It allows small and mid-size businesses suffering a loss of revenue and employing less than 500 workers to access federal loans, which are forgivable if 60% of the loan is spent on payroll and the balance on other qualified expenses.


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