Biden Changes PPP Loans in Favor of Smaller Businesses, Including Franchises

President Joe Biden announced on Monday that the Small Business Administration would prioritize small businesses with 20 employees or fewer for access to Paycheck Protection Program loans.

The SBA will establish a 14-day, exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees which will put sole proprietors, independent contractors and self-employed individuals at the front of the line to receive the forgivable loans. The 14-day period will start on Wednesday, February 24. Businesses that applied for PPP loans before the exclusive application period will still have their paperwork processed.

The move will benefit all small businesses that meet the criteria but could represent a particular bright spot for franchised businesses, which are often sole proprietorships with fewer than 20 employees. With approximately 775,000 franchise businesses in the U.S. providing jobs to about 8.43 million workers, the franchising industry includes thousands of firms that would qualify for the expedited loan process.

How PPP Loan Access Changed

Besides prioritizing small businesses, the SBA has taken steps to make the lending program more accessible. These include allowing small business owners with delinquent student debt and non-fraud felony charges to receive the loans. The first round of PPP loans, opened in April, received harsh criticism for allowing big businesses to borrow millions and disproportionately lending to white business owners.

This time around, the SBA seems determined to make access to the business-saving loans more equitable.

“The SBA is a frontline agency working to create an inclusive economy, focused on reaching women-owned, minority-owned, low- and moderate-income, rural and other underserved communities in meaningful ways,” Michael Roth, the SBA’s senior advisor said when announcing the changes. “The important policy changes we are announcing further ensure inclusivity and integrity by increasing access and much-needed aid to Main Street businesses that anchor our neighborhoods and help families build wealth.”

Biden echoed the need for the loans to target small businesses in an address announcing the changes.

“American small businesses are hurting and hurting badly, and they need help now,” said Biden.

How To Apply for PPP Loans

For small businesses interested in applying for the PPP loans, click here to find out how.