Biden to review small business loans to reach minority small businesses, official says
WASHINGTON (Nation Now- U.S. President Joe Biden on Monday announced changes to further target federal pandemic assistance on the nation’s smaller businesses and businesses owned by women and people of color.
Biden says many of these mom-and-pop businesses “were beefed up” by larger companies seeking federal funds in the early days of the pandemic. He said the changes that take effect on Wednesday will provide long-awaited help to those small businesses he says are “crushed” by the economic recession from the pandemic.
While small businesses face many challenges in today’s economy, intrepid founders are still pursuing their dreams of ownership and growth. Even amid the chaos of 2020, thousands of new ventures found success out of the gate, especially online.
Starting a business from scratch requires a mix of talent, smarts, and grit, but that’s just part of the equation. Regardless of industry, all companies need capital to set the wheels in motion and get things off the ground.
If you’re like most ambitious entrepreneurs — without tall mounds of cash on reserve — you’ll need a loan to establish your operations and start turning a profit ASAP. Luckily, in the modern era, you’ve got choices. There is a broad array of services and products available to you, complete with conditions, pros, cons, and considerations.
We’re here to walk you through the various types of business loans you might want to consider, and help you decide which ones are best suited for your needs based on your plan of attack. Let’s begin.
Why would you need a business loan?
Business loans aren’t just for the disadvantaged. No matter where your business is at in its life cycle, you might need a loan to take things to the next level, expand your operations to new territory, to help you in growing your business , or just navigate through some rocky times.
Every business owner comes from a different position in life, each with unique challenges, limitations, and advantages. This is why there are so many different kinds of business loans available, and why you should do substantial research and groundwork before pursuing a certain financing option.
“American small businesses are hurting, hurting badly, and need help now,” Biden said.
As part of the pandemic-era paycheck protection program, the administration is establishing a two-week window, starting Wednesday, in which only companies with fewer than 20 employees – the overwhelming majority of small businesses – can apply for forgivable loans.
Biden’s team also spends $ 1 billion on sole proprietors, such as home contractors and beauticians, the majority of which are owned by women and people of color.
Further efforts will remove the ban on lending to a business that is at least 20% owned by someone arrested or convicted of a non-fraudulent crime in the previous year, as well as allow those who are late on their federal student loans to seek relief through the program. The administration also clarifies that non-citizen legal residents can apply for the program.
First launched in the early days of the coronavirus pandemic and renewed in December, the program aimed to help Americans stay employed during the economic recession. It allows small and medium-sized businesses that experience a loss of income to access federal loans, which can be repaid if 60% of the loan is spent on payroll and the remainder on other eligible expenses.
The Biden effort aims to correct disparities in the way the program has been administered by the Trump administration.
Paycheck Protection Program data released Dec. 1 and analyzed by The Associated Press shows that many minority homeowners desperate for a relief loan did not receive one until the final weeks of the P3, while many other white business owners were able to get loans earlier in the program.
The program, which began on April 3 and ended on August 8 and made 5.2 million loans worth $ 525 billion, has helped many businesses stay afloat when government action to controlling the coronavirus have forced many businesses to shut down or operate at reduced capacity.
The latest PPP, which began Jan. 11 and ends at the end of March, has already disbursed $ 133.5 billion in loans – about half of the $ 284 billion allocated by Congress – with an average loan of less than $ 74,000. .
New program renewal not included in Biden’s $ 1.9 trillion ” American rescue planWhich he hopes Congress will adopt in the coming weeks.