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Biden administration announces changes to the PPP

Yahoo Finance’s Jessica Smith joins the Yahoo Finance live panel with the latest on stimulus and Biden’s changes to the PPP program.

Video Transcript

ZACK GUZMAN: First, we're just moments away from hearing updates from President Biden on tweaks to the Paycheck Protection Program and to streamline emergency loans for small businesses and loosen up the pathway to loan forgiveness. That coming as Congress plows ahead with finishing the final touches on the Democrats' $1.9 trillion relief program. For more on that, let's kick things off today with Yahoo Finance's Jessica Smith, who has the latest for us in Washington, DC. Jess.

JESSICA SMITH: Yeah, Zack, President Biden is announcing several changes to the Paycheck Protection Program today. That is that program that gives forgivable loans to small businesses. It's designed to help them keep their employees on the payroll. So the goal of these changes is to make sure the money is going toward the smallest of small businesses, the businesses that really need help the most.

So starting on Wednesday, larger businesses will be blocked out of applying for these loans for 14 days. So only businesses that have fewer than 20 employees will be able to apply for these loans. The administration says again, the goal is to make sure that the businesses who really need it, gets the money. And they say the larger businesses will still have time to apply before the program expires in March. So that window will start Wednesday at 9:00 AM and it will go till March 9.

The administration is also changing eligibility rules to make sure sole proprietor, self-employed and contractors are able to receive more money. The next change would remove restrictions that are currently in place for people who are behind on their federal student loans or people who have non-fraud felony convictions. And finally, the administration would ensure that non-US citizens who are lawful US residents do have access to the PPP funds. The administration says so far since the program re-opened on January 11, of the $285 billion allocated, about $135 billion has been approved in loans for 1.8 million small businesses.

And then the average loan size has been $74,000. Many of those are second draw loans given to businesses who have already received the loans last year. The relief bill that Congress is now considering would add another $7 billion to the Paycheck Protection Program. The House Budget Committee today is going to start considering that bill. That will be later this afternoon at about 1:00 PM. And then that sets up a full House vote, probably sometime Friday or Saturday. So we'll be keeping an eye on that. And Zack and Akiko, we are set to hear from President Biden in just about an hour.

ZACK GUZMAN: Yeah, Jess, I mean, when it comes to that stimulus pathway here, now that we know that the final touches are getting added, how much leeway is there in maybe tweaking some things as it makes its way through the House and the Senate?

JESSICA SMITH: There's really not much leeway at this point. The CBO did say over the weekend that the bill is actually a little more than $1.9 trillion. So they'll be trying to shave some things off maybe to fit that $1.9 trillion cap. They're also going, we're going to have to see what happens with that minimum wage proposal. Obviously, that's going to be a very tough sell. It's not clear if Senate rules would actually even allow it to be in the package. So that's something that we're really watching going forward.

ZACK GUZMAN: All right, Jessica Smith bringing us the latest there in Washington, DC. Appreciate that.