The Biden Administration is taking steps to ensure that the smallest of U.S. businesses can access the second round of forgivable loans from the Paycheck Protection Program.

For two weeks beginning Feb. 24, the U.S. Small Business Administration will only accept applications for PPP loans from firms with fewer than 20 employees.

Businesses with fewer than 20 employees represent 98% of small businesses.

"They are the Main Street businesses that anchor our neighborhoods and help families build wealth," the White House said in a statement.

"The 14-day exclusive application period will allow lenders to focus on these smallest of businesses."


The first round of PPP loans in April 2020 made $349 billion available to small businesses hurt by the coronavirus pandemic but that money went in two weeks, with Congress then approving another $320 billion in May.

Among the criticism with the first rounds of PPP was that the smallest of businesses and minority-owned businesses were being shut out of the loans.

Through January 2021, Connecticut businesses accessed over $1 billion in new PPP loans.

That has changed with the second round of PPP loans—$284 billion—which Congress approved late last year.

Through January 2021, Connecticut businesses accessed over $1 billion in new PPP loans.

In the second round of PPP lending, funding is up nearly 60% to small businesses with fewer than 10 employees compared to the first round, the White House said.


It also noted that the share of funding going to small businesses in rural areas is up nearly 30%, and that funding distributed through community development financial institutions and minority depository institutions is up more than 40%.

The SBA will also help sole proprietors, independent contractors, and self-employed people receive more financial support.

Among these businesses, those without employees are 70% owned by women and people of color, yet many were excluded from the PPP or approved for loans as small as $1 based on calculations.

The SBA will revise the loan-calculation formula to offer more relief to these small businesses and set aside $1 billion for businesses without employees and located in low- and moderate-income areas.

It is also eliminating a restriction that prevented small business owners from obtaining a PPP loan if they had a prior non-fraud felony conviction.

The administration will adopt reforms that eliminate a one-year look back on convictions unless the applicant or owner is incarcerated when the application is submitted.

Other Changes

The administration will also:

  • Eliminate an exclusionary restriction that prevents small business owners who are delinquent on federal students loans from obtaining a PPP loan
  • Ensure access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Numbers to apply for loans
  • Address waste, fraud, and abuse of the program
  • Continue to collect feedback from loan applicants and recipients to to learn more about challenges and opportunities in the PPP program