President Joe Biden visited a hardware store in the nation’s capital last Tuesday to highlight changes he made to the paycheck protection program for the benefit of small businesses that he says have been overlooked by the Trump administration more early in the coronavirus pandemic.
Biden administration officials announced last month that for two weeks starting February 24, the Small Business Administration will only accept forgivable loan program applications from companies with fewer than 20 employees. This is to ensure that they are not squeezed out by the big companies.
The period of exclusivity for small businesses ended on March 9, with White House officials reporting that the effort resulted in a 20% increase in minority businesses and a 14% increase in female businesses receiving loans. There was also a 12% increase in businesses in rural communities receiving loans, compared to the daily average for the 10 days preceding the exclusivity period.
“We found out that a lot of that money went to bigger companies that weren’t supposed to qualify,” Biden said during a visit to the WS Jenks & Son hardware store.
The Biden administration also changed the program’s eligibility rules. Self-Employed, Sole Proprietors and Qualified Independent Contractors for more money. Restrictions banning some business owners who were previously ineligible due to student loan debt and non-fraudulent felony convictions have also been lifted.
Biden met with the co-owners of the hardware store, as well as the owner of Little Wild Things Farm, a vertical urban farm located on the same property. The two companies 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 shortage due to the pandemic. He faced critical however, for having leaned too much towards large companies and national chains.
Trump administration officials have argued that the program primarily benefits small businesses, as the vast majority of loans in the program’s early months were less than $ 150,000. But more than half of the loan money actually went to big business.
The SBA has disbursed about $ 680 billion of the $ 796 billion Congress allocated to the program.