By Kiernan Nicholls
The Biden administration is expanding the federal Paycheck Protection Program as well as targeting women and minority-owned businesses to give them greater access to loans during the COVID-19 pandemic. With less than half the allocated $284 billion in PPP funds yet to be claimed, by U.S. businesses, the Small Business Administration has said it would soon begin accepting a new round of applications.
Today through the end of March 2021, the SBA will accept applications for low-interest, forgivable PPP loans to cover payroll and other operating expenses of businesses affected by the pandemic.
But for the first two weeks, SBA will accept applications only from businesses with fewer than 20 employees. President Joe Biden said Monday that the latest round of PPP loans would address previous shortcomings, especially inequities in distribution to small businesses owned by women and minorities. Congress approved PPP as a major component of last year’s pandemic stimulus package.
The 19th, a non-profit news organization, reported Monday that businesses “without employees — many cleaning services, Uber drivers, consultants, beauticians — are overwhelmingly owned by women and people of color. About 90 percent of women-owned businesses have no employees other than the owner.”
An analysis by the Investigative Reporting Workshop of the loans already disbursed found that 79% of applications did not include the gender of the business owner. Of those that did report gender, only one in five were female. Female-owned businesses borrowed an average of $86,324 compared with the $131,096 average borrowed by male-owned businesses.
The data on race and ethnicity is similar, with 90% of applications missing race information. Among applications for which race was reported, 77% were from white-owned businesses.
An administration official told reporters that the two-week exclusive period would “give lenders and community partners more time to work with these Main Street businesses that anchor our neighborhoods and help families build wealth, while also ensuring larger PPP-eligible businesses will still have plenty of time … over three weeks to apply for and receive support before the program expires.” according to a Wall Street Journal report Monday.
Other changes to the program include expanding availability to business owners with felony convictions or outstanding student loan debt as well as a specific pool of money for businesses without employees that are in low-income communities.
The administration also said it was increasing efforts to combat fraud in the program. About 240,000 loans already approved have been flagged for further review, according to a Jan. 26 Wall Street Journal report.
The Department of Justice announced earlier this month that federal attorneys have already prosecuted more than 100 defendants accused of PPP fraud, seizing $60 million in cash and “numerous real estate properties and luxury items purchased with such proceeds,” including a $318,000 Lamborghini sports car.
The Accountability Project has been made possible through a grant from the Reva and David Logan Foundation.