Biden Makes ‘Equitable’ PPP Loans Easier To Get For Some Felons, Ensures Access For ‘Non-Citizen’ Small Business Owners

The Biden administration announced Monday that it was changing the Paycheck Protection Program (PPP) to make it easier for felons and those who have a history of being delinquent in paying back loans to get PPP loans.

The statement from the administration highlighted the importance that small businesses play in the U.S. economy—accounting for more than 40 percent of the U.S. GDP, creating nearly two-thirds of new jobs, and employing nearly half of the country. The administration specifically claimed that people of color have been hit hard from the pandemic as it promised to deliver “equitable relief.”

“Now, millions of main street small businesses–especially Black-and Brown-owned small businesses–are struggling to make ends meet in the wake of the COVID-19 pandemic and resulting economic crisis,” the statement said. “The Biden-Harris administration has made delivering equitable relief to hard-hit small businesses a top priority.”

The administration’s new plan will institute a two-week period in which only small businesses that employ fewer than 20 employees can apply for relief in the program.

The announcement highlighted the Biden administration’s efforts to make getting PPP loans easier for some felons and people who have been delinquent in paying back their federal student loans. The new plan also makes sure that non-citizens who are lawfully in the U.S. can get access to the funds.

With respect to those three items, the announcement said:

• Consistent with a bipartisan bill, eliminate an exclusionary restriction that prevents small business owners with prior non-fraud felony convictions from obtaining relief through the Paycheck Protection Program.  Currently, a business is ineligible for PPP if it is at least 20 percent owned by an individual who has either: (1) an arrest or conviction for a felony related to financial assistance fraud within the previous five years; or (2) any other felony within the previous year. To expand access to PPP, the Biden-Harris administration will adopt bipartisan reforms included in the PPP Second Chance Act, co-sponsored by Senators Ben Cardin (D-MD), Rob Portman (R-OH), Cory Booker (D-NJ), and James Lankford (R-OK), which would eliminate the second restriction (the one-year look-back) unless the applicant or owner is incarcerated at the time of the application.
• Eliminate an exclusionary restriction that prevents small business owners who are delinquent on their federal student loans from obtaining relief through the Paycheck Protection Program. Currently, the PPP is not available to any business with at least 20 percent ownership by an individual who is currently delinquent or has defaulted within the last seven years on a federal debt, including a student loan. Millions of Americans are delinquent on student loans, including a disproportionate number of Black borrowers. Working with the Departments of the Treasury and Education, the SBA will remove the student loan delinquency restriction to broaden access to the PPP.
• Ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Numbers (ITINs) to apply for relief. The PPP statute is clear that all lawful U.S. residents may access the program, but a lack of guidance from the SBA has created inconsistency in access for ITIN holders like Green Card holders or those here on a visa. The SBA will address this unfair inconsistency by issuing clear guidance in the coming days that otherwise eligible applicants cannot be denied access to the PPP because they use ITINs to pay their taxes.

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