President Biden changed the main U.S. COVID-19 aid program for small businesses this week in an attempt to reach smaller businesses and sole proprietors left behind in previous rounds of aid.
For two weeks, starting on February 24, the Small Business Administration will accept applications for forgivable Paycheck Protection Program loans only from companies with fewer than 20 employees, to ensure that they are not crowded out by larger firms.
When the program was launched last April, its initial $349 billion ran out in two weeks. Congress approved another $320 billion last May, but the program expired in August with about $130 billion in unused funds.
The program was relaunched this past January with $284 billion in new funds from a coronavirus aid bill enacted at the end of December. A Biden administration official said that about $150 billion of PPP money is still available.
However, administration officials said many minority-owned and very small businesses in low-income areas had not been able to receive aid, according to Business Insider. The changes are designed to make it easier for businesses with no employees that previously could not qualify because of business cost deductions.
The share of funding for small businesses with fewer than 10 employees in the program has increased by nearly 60 percent in the last month and that the share of funding going to small businesses in rural areas is up nearly 30 percent.
Another tweak to the program includes removing a previous ban against businesses with at least 20 percent of their ownership represented by individuals arrested or convicted for non-fraud felonies within the past 12 months from receiving funding. Also, those who are behind on student loans and legal, non-citizen residents now can apply for PPP funds.
Applications for this round of PPP funding will be accepted through March 31.
