Washington: The Biden administration will give the country’s smallest employers two weeks of exclusive access to emergency loans, in a bid to funnel aid to businesses that have struggled the most to obtain the funds during the pandemic.
From this week till March 9, only businesses with fewer than 20 employees will be able to apply for aid through the massive Paycheck Protection Program, which offers loans that can be converted into grants if businesses keep paying workers. It is one of a series of steps the administration will announce on Monday to target aid at underserved businesses.
Less than half of the PPP’s more than $284 billion in current funding has been used since it relaunched Jan. 11, with little concern that it would be exhausted. But the program has been dogged by concerns since its creation last year that it was failing to reach the hardest-hit employers, particularly minority-owned businesses that lack relationships with banks responsible for processing PPP applications.
While the Small Business Administration, which runs the PPP, has seen improvements in funds reaching smaller businesses, administration officials told reporters over the weekend that they were limiting access to the program to push lenders to do even more to work with the smallest employers. 98 percent of small businesses have fewer than 20 employees, according to the Biden administration.
Monday’s announcement marks President Biden’s first major move to put his stamp on the PPP program and reflects his pledge to make economic equity a top priority.