Skip navigation
ppp-loan-Biden.jpg DoraDalton / iStock / Getty Images Plus
Biden is making adjustments to some of the previous restrictions on loan applications, in addition to helping the smallest businesses.

President Biden adjusts PPP lending rules to better aid small businesses

Businesses with fewer than 20 employees will have a dedicated 14-day window to apply for Paycheck Protection Program loans

President Joe Biden announced Monday adjustments to the Paycheck Protection Program to aid smaller businesses in applying for loans. Starting Wednesday, Feb. 24 at 9 a.m. EST for a 14-day period, only businesses with fewer than 20 employees (comprising 98% of small businesses) will be able to apply for PPP loans, giving lenders a chance to focus on the smallest Main Street businesses.  

“These businesses often struggle more than larger businesses to collect the necessary paperwork and secure relief from a lender,” the Biden administration said in a press release Monday. “The Biden-Harris administration will also make a sustained effort to work with lenders and small business owners to ensure small businesses take maximum advantage of this two-week window.”

Biden also said he would be working with lenders to improve the “digital front door” and reach out to stakeholders to ensure they’re working with the smallest businesses that need loans during this timeframe.

Other changes Biden announced he would make to the Paycheck Protection Program include:

  • Tweaking the “loan calculation formula to help sole proprietors, independent contractors, and self-employed business owners receive more support.
  • Setting aside $1 billion for businesses without employees in low and moderate-income areas. Previously, small independent retailers — of which 70% are owned by women and people of color — were either ineligible because they had no payroll or else received as little as $1 with their application.
  • Allowing non-citizen small business owners who are U.S. residents to use their ITINs (Individual Tax Identification Numbers) to apply for relief. Previously, it was unclear whether Green Card holders or visa workers would be able to apply for PPP loans.
  • Removing the previous PPP loan eligibility requirement that prevented small business owners from receiving funds if they had prior, non-fraud felony convictions. Currently, a business is ineligible for PPP if the business is at least 20% owned by someone who either was arrested or has a conviction for a felony related to financial fraud in the past five years, or who has a felony record from the past year. This bipartisan effort would eliminate the latter requirement and is based on the PPP Second Chance Act, co-sponsored by Senators Ben Cardin (D-Md.), Rob Portman (R-Ohio), Cory Booker (D-N.J.), and James Lankford (R-Okla.)
  • Eliminating a restriction that excluded business owners from receiving PPP loans if they were delinquent on or have defaulted on any of their federal student loan debt within the last seven years.  

In addition to these steps, Biden said his administration will continue to take steps to address fraud and waste across all federal assistance programs, improving the PPP loan application, updating the SBA websites to improve access, and improving communication between lenders and the Small Business Administration.

Currently, the latest round of PPP loans has only deployed $2.4 billion to small, lower-middle income employees, though the original goal was to distribute $15 billion of loans. Biden attributes this disparity to a large proportion of loans in wealthier areas being distributed to businesses with more than 20 employees.

This deadline for this round of PPP funding for all businesses ends March 31.

Contact Joanna at [email protected]

Find her on Twitter: @JoannaFantozzi

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.