In United States Small businesses account for 44 percent of U.S. GDP, create two-thirds of net new jobs, and employ nearly half of America’s workers. Now, millions of main street small businesses – especially Black- and Brown-owned small businesses – are struggling to make ends meet in the wake of the COVID-19 pandemic and resulting economic crisis.
The Biden-Harris administration has made delivering equitable relief to hard-hit small businesses a top priority. The latest round of Paycheck Protection Program (PPP) funding opened just one month ago and it represents a marked improvement on the prior round of the Program last year. Compared to the same point in the Program last year:
- The share of funding going to small businesses with fewer than ten employees is up nearly 60 percent
- The share of funding going to small businesses in rural areas is up nearly 30 percent
- The share of funding distributed through Community Development Financial Institutions and Minority Depository Institutions is up more than 40 percent
The Biden-Harris administration is announcing several reforms to build on this success by further targeting the PPP to the smallest businesses and those that have been left behind in previous relief efforts. While these efforts are no substitute for passage of the American Rescue Plan, they will extend much-needed resources to help small businesses survive, reopen, and rebuild. Specifically, the Biden-Harris administration will:
- Institute a 14-day period, starting Wednesday, during which only businesses with fewer than 20 employees can apply for relief through the Program.
- Help sole proprietors, independent contractors, and self-employed individuals receive more financial support.
- Consistent with a bipartisan bill, eliminate an exclusionary restriction that prevents small business owners with prior non-fraud felony convictions from obtaining relief through the Paycheck Protection Program.
- Ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Numbers (ITINs) to apply for relief.
- Eliminate an exclusionary restriction that prevents small business owners who are delinquent on their federal student loans from obtaining relief through the Paycheck Protection Program.