February 24, 2021

Congresswoman Barbara Lee Applauds Biden Executive Actions on Relief for Small Businesses

Washington, D.C. – Rep. Barbara Lee released a statement applauding executive actions taken by President Joe Biden to increase economic relief for small businesses.  

President Biden’s Executive Actions include several reforms to the Paycheck Protection Program to target relief the hardest hit businesses, including a two-week window for small businesses with fewer than 20 employees to apply for funding. Nearly 98 percent of small businesses have less than 20 employees. These actions also aim to increase relief for sole proprietors, independent contractors, and self-employed individuals, which are nearly 70 percent women and people of color. Previously, these individuals were excluded from PPP loans or were approved for as little as $1.

“Small businesses are the backbone of our economy, employing nearly half of our nation’s workers. Since the start of the pandemic, millions of small businesses, especially Black and minority-owned businesses are struggling to keep their doors open,” said Congresswoman Lee

“The pandemic’s disproportionate impact on minority-owned small businesses shows that when the country is in crisis, communities of color are impacted mostI am pleased that the Biden-Harris administration is taking critical steps to help our small businesses survive this crisis and ensuring that Black and minority-owned small businesses are not left behind. 

“As the Biden-Harris Administration advances these reforms, the House is also working to pass the American Rescue Plan, a comprehensive relief package that will help millions of struggling people across our country survive this crisis and help small businesses reopen and rebuild. We must deliver relief to struggling families, it’s long overdue.”

Other reforms to the program include: 

  • Help sole proprietors, independent contractors, and self-employed individuals receive more financial support. These types of businesses, which include home repair contractors, beauticians, and small independent retailers, make up a significant majority of all businesses. Of these businesses, those without employees are 70 percent owned by women and people of color. Yet many are structurally excluded from the PPP or were approved for as little as $1 because of how PPP loans are calculated. To address this problem, the Biden-Harris administration will revise the loan calculation formula for these applicants so that it offers more relief, and establish a $1 billion set aside for businesses in this category without employees located in low- and moderate-income (LMI) areas.
  • 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.

Please see additional resources for Small Businesses below: