The Biden administration will give the country's smallest employers two weeks of exclusive access to emergency loans, in a bid to target aid to minority-owned businesses and other companies that have struggled the most to obtain the funds during the pandemic.
From Wednesday morning to the evening of 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 announced on Monday to get more aid to underserved businesses.
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While the Small Business Administration, which runs the PPP, has seen improvements in funds reaching smaller businesses, administration officials told reporters Sunday night that they were limiting access to the program to push lenders to do even more to work with the smallest employers.
Politico
That might be bullshit if, like last time they launched the program, banks loaned to preferred businesses with big accounts, which was big businesses.
"During that two-week period we want lenders to be really focused on serving existing clients that are in the under-20-employee category and then going out proactively to find new small businesses with under 20 employees to help," one administration official said.
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PPP lenders, which had not been briefed on the plan before its announcement, will be key to implementing the changes. The administration plans to brief them today. Some bankers were already voicing skepticism about how the changes would work and whether they were even necessary.
Banks have proven themselves to be sharks over and over again. Open the tap to small businesses and let the banks handle their large customers.
The [PPP] program has been hugely popular but has faced a series of controversies related to loans that initially went to big companies, unclear rules for lenders, and significant fraud.
Most recently, the SBA faced complaints that anti-fraud measures it imposed in the latest iteration of the program in response to criticism last year were too stringent, forcing it to rethink its safeguards against scammers so legitimate businesses didn't face delays in receiving aid.
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The changes include revising eligibility calculations so that sole proprietors, independent contractors and self-employed individuals receive more funds. The administration said it also planned to set aside $1 billion for businesses that are in that category and are located in low-and-moderate-income areas.
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In addition, the SBA will eliminate restrictions on business owners with non-fraud felony convictions and those delinquent on their federal student loans. The agency will also clarify that business owners who are non-citizen, U.S. residents can use Individual Taxpayer Identification Numbers to apply for relief.
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Consumer Bankers Association President and CEO Richard Hunt said the revamp will make it "somewhat easier" for the smallest businesses in the country, including those in low- and moderate-income areas, but that the administration needed to do more to cut red tape.
“However, without addressing issues lenders have raised since the program reopened, like streamlining some of the bookkeeping requirements imposed by Congress and addressing issues with the SBA’s internal processing systems, this two-week window will not fundamentally alter the roadblocks businesses are facing," he said. "It is like giving everyone a train ticket on an unfinished railroad.”
...but hey, do what you want...you will anyway.
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