WASHINGTON – A federal program that gives loans to companies to assist them keep afloat through the coronavirus pandemic is present process some adjustments to permit extra money to be directed at small companies that want it most.
Whereas this system delivered pressing aid to many companies throughout the nation, the preliminary spherical of loans issued beneath this system final yr omitted too many minority-owned and mom-and-pop companies whereas bigger corporations which are higher related obtained the funds shortly, administration officers mentioned Sunday.
To deal with these considerations, Biden will announce that solely companies with fewer than 20 staff shall be allowed to use for this system over a 14-day interval that begins Wednesday. Some 98% of small companies have fewer than 20 staff, and the 14-day software interval will permit lenders to deal with serving them, administration officers mentioned.
The administration additionally will revise this system’s mortgage calculation system in order that unbiased contractors, self-employed people and sole proprietors could have a greater likelihood of getting the loans. Underneath the present system, many of those companies, which embody residence restore contractors, beauticians and small unbiased retailers, have been excluded from this system or authorized for as little as $1.
As well as, Biden plans to get rid of provisions that bar small enterprise homeowners from collaborating in this system if they’ve a previous felony conviction, or are at present delinquent or have defaulted on their federal scholar loans up to now seven years.
One other change will make it simpler for small enterprise homeowners who aren’t U.S. residents however are authorized residents of the nation to entry the loans through the use of their particular person taxpayer identification numbers to use for this system.
Greater than 5 million companies obtained loans totaling $525 billion via the Paycheck Safety Program final yr. Congress allotted $284 billion for an additional spherical of loans in December. Up to now, solely $134 billion has been awarded to 1.eight million small companies within the newest spherical.
The loans might be forgiven if an organization spends at the least 60% of the cash on payroll bills, corresponding to wages, salaries, group medical insurance, and a most of 40% on different qualifying bills.
This system expires on the finish of March.
Michael Collins covers the White Home. Comply with him on Twitter @mcollinsNEWS.