An alteration to the Paycheck Protection Program (PPP) by the Biden Administration will take effect this week.
Biden is set to announce a change in PPP rules this afternoon, which will last for two weeks beginning Wednesday, Feb. 24.
Starting Wednesday at 9 a.m. ET, only businesses with fewer than 20 employees will be able to apply for loans. According to Biden, the change is to increase racial equity and reach the smallest of small businesses in the U.S.
“Small businesses are the engines of our economic progress. They’re the glue, and the heart and soul of our communities. But they’re getting crushed,” Biden said during a recent White House event.
The PPP received $284 billion for small business loans as part of December’s $900 billion COVID-19 relief package and reopened to lenders and borrowers on Jan. 11.
In the first month, the Small Business Administration has approved about $134 billion in forgivable small business loans to about 1.8 million small businesses for an average loan size of about $74,000.
Around 80 percent of those loans have gone to businesses with less than 10 employees.