- The Washington Times - Monday, February 22, 2021

President Biden’s massive coronavirus relief package doesn’t extend the Paycheck Protection Program beyond next month, but Mr. Biden moved Monday to open the popular loan program to smaller businesses, certain ex-felons, non-U.S. citizens and others left out of vital COVID-19 aid for businesses.

Mr. Biden said too many mom-and-pop shops got crowded out by big corporations in earlier rounds of funding last year and Congress needs to pass his $1.9 trillion relief package to give them an additional lifeline.

“This is a starting point, not the ending point,” Mr. Biden said.

Mr. Biden said he is eliminating restrictions so that a “student loan default” or a “non-fraud-related criminal record” won’t bar eligibility for funds through the program, which provides forgivable loans to cash-strapped businesses to make payroll.

“We’re also making it easy for those one-person businesses — like the home repair contractors, beauticians, small, independent retailers — to secure forgivable PPP loans,” he said.



Congressional Democrats rejected proposals to put further restrictions on access to PPP funds, such as convictions for violent sexual felonies, said Rep. Blaine Luetkemeyer, Missouri Republican.

“All of these amendments were rejected by Committee Democrats as they rammed through their entirely partisan agenda, and the new PPP reforms announced today follow that same political strategy,” said Mr. Luetkemeyer, the top Republican on the House Small Business Committee.

The House Budget Committee voted to advance the broader package Monday as Democrats race to get the bill through the chamber by the end of the week.

Republicans said the money isn’t targeted sufficiently and that much of the apparently vital funding won’t even be spent this year.

“This is the wrong plan at the wrong time and for all the wrong reasons,” said Rep. Jason Smith of Missouri, the top Republican on the Budget Committee.

For the expanded loan program, small-business owners who are legal U.S. residents but not U.S. citizens, such as green card holders, can use individual taxpayer identification numbers to apply for relief, according to forthcoming guidance from the Small Business Administration.

There will be a 14-day period, starting Wednesday, during which only businesses with fewer than 20 employees can apply for loans.

“These small businesses — not the ones with 500 employees, but these small businesses with a handful of folks — they are 90% of the businesses in America,” Mr. Biden said.

Though the program is due to expire next month, Mr. Biden’s relief package includes an additional $7.25 billion in PPP funds and expands the program’s eligibility criteria to include certain nonprofit groups.

The broader relief package also includes $25 billion for restaurants, which have been among the hardest-hit by coronavirus-related lockdowns, and $15 billion for a disaster loan program for small businesses.

The package includes direct payments of up to $1,400 for millions of Americans, $350 billion for states and localities and $170 billion for K-12 schools and colleges, among other items.

For PPP, more than 7 million loans collectively totaling more than $662 billion have been approved since the program started last year, according to the Small Business Administration.

Congress authorized another round of $284 billion for the program in a $900 billion relief package that became law in December. The program reopened for loan applications in mid-January, and companies have until the end of March to apply for either a first or second round of funding.

Small-business groups said the changes Mr. Biden announced Monday were welcome but likely not enough.

“The revised PPP calculation and reforms released today is welcomed news for not only the self-employed but the countless additional small businesses who will now be eligible to apply for loans they need to survive during this ongoing pandemic,” said Keith Hall, president and CEO of the National Association for the Self-Employed. “But this cannot be the end of support for the small-business community.”

Richard Hunt, president and CEO of the Consumer Bankers Association, said new two-week window for companies with fewer than 20 employees isn’t likely to fix other roadblocks, such as bookkeeping requirements and internal processing issues at the SBA.

“It is like giving everyone a train ticket on an unfinished railroad,” Mr. Hunt said.

Alfredo Ortiz, president and the CEO of the Job Creators Network, a free market small-business advocacy group, called on the Biden administration to clarify to states that companies can deduct PPP-related expenses on their tax returns.

“The Biden administration should follow up its PPP changes by using its bully pulpit to demand that state lawmakers follow federal guidelines and make PPP loans fully nontaxable,” Mr. Ortiz said. “Such a move would help small businesses far more than the PPP changes made this week.”

The program attracted some unwanted attention last year after major chains such as Ruth’s Chris Steak House reported applying for and receiving money as small businesses were struggling to navigate the system.

Ruth’s Chris and some other big companies later returned the money.

Lawmakers attached additional strings to the latest round of $284 billion, about half of which has been spoken for since the SBA started taking applications last month.

Companies that have already applied for loans can come back for a second round if they employ no more than 300 people, demonstrate a 25% loss in gross receipts for any quarter last year and have used or will use the full amount of their first loan.

The share of funding in the latest round going to businesses with fewer than 10 employees is up nearly 60%, the White House said.

Businesses are ineligible for PPP money if they are at least 20% owned by someone who has been charged with or convicted of financial-related fraud in the past five years or who has another felony conviction within the past year.

The administration said it would move to eliminate the one-year look-back restriction unless the applicant is in jail when the application is filed.

The change is modeled on bipartisan legislation from last year that attracted support from groups across the political spectrum, including the American Civil Liberties Union, the American Conservative Union and FreedomWorks.

This “will ensure that small-business owners who have spent time in the criminal justice system are not defined by their past mistakes,” said Sen. Rob Portman, the Ohio Republican who introduced the bill.

The administration said PPP makes clear that all lawful U.S. residents can access the program but that the SBA hasn’t done enough to clarify that green card or visa holders are eligible.

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