Biden Administration Promises Smoother PPP Process
Officials are also creating a $1 billion PPP fund for sole proprietors, independent contractors and self-employed people.
The Biden Administration on Monday vowed to improve communication with lenders, as the Small Business Administration and financial institutions attempt to process thousands of Paycheck Protection Program loans.
“The SBA’s goal is to make it easier for lenders to make PPP loans and to continue its relationships with this broader network of lending partners to expand access to capital after the PPP,” the administration said as it rolled out changes to the PPP process.
The SBA also announced that starting Wednesday and for 14 days after that, only businesses that have fewer than 20 employees may apply for PPP loans. They said that 98% of small businesses have fewer than 20 employees.
“These businesses often struggle more than larger businesses to collect the necessary paperwork and secure relief from a lender,” the administration said. “The 14-day exclusive application period will allow lenders to focus on serving these smallest businesses.”
Administration officials said that in an effort to improve the PPP process, during the past several weeks, the SBA has hosted calls with more than 6,000 attendees and met with financial trade groups in an effort to better understand problems with the PPP loan process.
Members of Congress and others have reported that last year, there was a significant amount of waste, fraud and abuse in the PPP program. Administration officials said they now are checking SBA fraud records, the Treasury Department’s “Do Not Pay” database and other public records before a loan is approved. They said that while there may no longer be “instantaneous approval” of loans, more than 96% of loan applications are approved within 48 hours.
Administration officials said they also are creating a $1 billion PPP set-aide fund for sole proprietors, independent contractors and self-employed people.
The administration announced several other changes to the PPP program, including that:
- Small business owners with prior non-fraud felony convictions now will be eligible for loans.
- Small business owners who are delinquent on their student loans also will be eligible for PPP loans.
- Non-citizen small business owners who are lawful U.S. residents may use an Individual Taxpayer Identification Number to qualify for a loan.