Biden visits businesses to highlight changes to loan program
WASHINGTON (AP) — President Joe Biden visited a hardware store in the nation’s capital Tuesday to highlight changes he made to the Paycheck Protection Program to benefit small businesses he says were overlooked by the Trump administration earlier in the coronavirus pandemic.
Biden administration officials announced last month that for two weeks starting on Feb. 24, the Small Business Administration would only accept applications for the forgivable loan program from firms with fewer than 20 employees. That’s meant to ensure that they are not crowded out by larger firms.
The exclusivity period for small businesses ends Tuesday, with White House officials reporting that the effort led to a 20% increase in minority businesses and a 14% increase in women businesses receiving loans. There was also a 12% boost in businesses in rural communities receiving loans, compared to the daily average of the ten days preceding the exclusivity period.
“We found out that an awful lot of that went to bigger businesses that weren’t supposed to qualify,” Biden said during a visit to W.S. Jenks & Son hardware store.
The Biden administration also changed eligibility rules for the program. Self-employed, sole proprietors and independent contractors can now qualify for more money. Restrictions prohibiting some business owners who were previously ineligible because of student loan debt and non-fraud felony convictions were also lifted.,
Biden met with the co-owners of the hardware store, as well as the owner Little Wild Things Farm, an urban vertical farm located on the same property. Both businesses received a loan in the past two weeks.
The Paycheck Protection Program was established by the CARES Act last year as businesses faced an immediate cash crunch because of the pandemic. It faced criticism, however, for tilting too heavily to large businesses and national chains.
Trump administration officials argued the program primarily benefitted smaller businesses because a vast majority of the loans in the first months of the program were for less than $150,000. But more than half the money allotted for the loans in fact went to big businesses.
The SBA h as disbursed about $680 billion of the $796 billion of funding appropriated by Congress for the program.