PPP changes aim to help minority-owned and small businesses

By CommonWealth Staff 0 Comments Feb 26, 2021

The Biden administration this week has made a series of recent changes to the federal Paycheck Protection Program aimed at helping more businesses struggling to stay afloat one year after the pandemic began.

In an effort to target small and minority-owned businesses, Biden said that for a two-week period starting February 24, only businesses with fewer than 20 employees will be able to apply for the forgivable loans. The move is intended to keep the businesses from being crowded out of the program by large companies, a criticism leveled at earlier rounds of the program.

On March 10, the program will open back up to everyone else, with applications due by March 31 when the program is due to sunset.

Some business leaders in Massachusetts, however, are skeptical of how much impact the new targeted program will have. “I just think that in some ways it might be a little too late,” said Greg Reibman, president of the Newton-Needham Regional Chamber of Commerce. “It’s trying to help some really vulnerable businesses that may have already given up.” He said a deadline extension could encourage many small businesses who need the extra time to get their applications in order.

PPP eligibility requirements were also changed so applicants delinquent on student loans and those with prior felony convictions can apply, along with noncitizen immigrants who pay taxes with ITIN numbers. The loan calculation formula was adjusted so independent contractors and the self-employed can be eligible for larger amounts.

In Massachusetts, nearly 118,000 businesses received PPP loans in earlier rounds in 2020.

“This is a very welcome change, because unfortunately in the first rounds, a lot of Latino businesses got left out,” said Eneida Román, co-founder of the nonprofit advocacy group Amplify Latinx.

“Super small microbusinesses couldn’t get PPP loans because they didn’t qualify in the sense that they weren’t generating enough income,” she said.

But Román said there have been problems in communicating all the eligibility changes to banks and, as a result, there is confusion over which small businesses will end up getting funds.

The Paycheck Protection Program was first introduced last March by the Trump administration to help businesses continue to pay workers after the pandemic hit. The program received an infusion of $284 billion during the second stimulus package in December. Some businesses that are low on funds can apply again during each round if they can prove need.

The loans are forgiven if 60 percent of the funds are used for payroll. For those not eligible for forgiveness, the interest rate on loans is 1 percent.

On Monday, Biden said 400,000 small businesses have closed due to the pandemic, and millions more are at risk. The federal Small business Administration, which is administering the program, said the first two PPP rounds helped 5.2 million small businesses keep 51 million workers employed.

About a fifth of loans in the new round are going to the lodging and food services sector, more than double the amount of last spring, an indication that hotels and restaurants continue to be hard hit.

A December 2020 study of revenue among small businesses in Massachusetts showed there was a 55 percent decrease in the number of small businesses that remained open in the leisure and hospitality sector from January to December 2020.

Local banks have been flooded by hundreds of requests every time a new shift or infusion of cash is added to the federal program.

Last April, the National Small Business Association reported that 52 percent of small businesses with 20 employees or more received approval for their PPP loan, while only 18 percent of enterprises with 10 or fewer employees received approval. That breakdown has shifted significantly since then. Since January, the SBA has approved about $134 billion in loans to about 1.8 million small businesses, with 80 percent of loans going to businesses with 10 or fewer employees.

Whether or not this week’s changes will have much impact remains to be seen. Reibman, the Newton-Needham chamber of commerce leader, thought the two-week window carved out for only small business applicants was too short and he wondered whether large banks, such as Bank of America, will be “suddenly bending over backwards” to help tiny businesses.

SARAH BETANCOURT

FROM COMMONWEALTH

Gov. Charlie Baker plays PR hardball. An hour after taking heat from lawmakers about the state’s vaccination appointment website, he announces a series of reopening measures, easing restrictions on theaters and restaurants starting Monday and moving to the final phase of reopening on March 22, which would allow fans to attend sporting events.

At a legislative oversight hearing, Baker insisted the real problem with the vaccine rollout is the lack of vaccine supply. But some lawmakers said the state’s glitchy vaccine appointment website and the rapid policy reversals were not caused by a lack of vaccines. “My constituents and all of our constituents are justifiably asking why the governor of Massachusetts, in the health care and technology capital of the country, cannot figure out how to operate a website,” said Sen. Eric Lesser of Longmeadow.

Marylou Sudders, the secretary of health and human services, said the state is not going all-in on the seven mass vaccination sites. She sees them as a short term solution.

Massachusetts has received $71 billion in federal aid since the pandemic began.

Opinion: Mark Erlich has an observation: Russell “Stringer” Bell of The Wire would be good at distributing vaccine.

FROM AROUND THE WEB

BEACON HILL

The House rejects proposed reforms to bring more transparency to committee operations. (State House News Service)

MUNICIPAL MATTERS

Lowell school committee member Robert Hoey is resisting widespread calls to resign after he used an anti-Semitic slur on a local public access television show. (Boston Globe)

Holyoke Mayor Alex Morse, who previously announced he will not seek reelection, is hired to be the town manager in Provincetown. Holyoke City Council President Todd McGee is in line to become the acting mayor. (MassLive)

Neighbors are complaining that a Rockport resident put up a large sign that says, fully spelled out, “Fuck Biden.” (Gloucester Daily Times)

HEALTH/HEALTH CARE

The Department of Public Health found that a drug detox facility in Falmouth has denied treatment to MassHealth clients. (Cape Cod Times)

Pfizer is testing whether a third dose of its vaccine will provide added immunity against coronavirus variants. (Boston Herald)

WASHINGTON/NATIONAL/INTERNATIONAL

President Biden’s proposal to boost the minimum wage to $15 an hour was ruled out of order by the Senate parliamentarian as part of the big $1.9 trillion stimulus bill Congress is considering. (Washington Post)

Donald Trump’s tax returns are turned over to the Manhattan district attorney’s office. (NPR)

The Federal Communications Commission approves a $50 subsidy for low-income people to buy broadband internet service. (New York Times)

BUSINESS/ECONOMY

The company and owner of the firm employing two men who were killed Thursday morning at a downtown Boston construction site have a long history of workplace safety violations. (Boston Globe)

Vaccine manufacturer Moderna earned $571 million in profit in the fourth quarter of 2020 — compared to just $14 million in the same quarter the prior year. Its total revenue was a whopping $803 million in 2020. (MassLive) The company said it expects more than $18 billion in revenue this year from its COVID-19 vaccine. (Boston Globe)

The classic children’s toy Mr. Potato Head goes gender neutral. (Associated Press)

EDUCATION

An investigation shows Fall River Superintendent Matt Malone violated several school department policies and suggested that Mayor Paul Coogan orchestrated staff complaints against him. (Herald News)

As Worcester plans to shift to hybrid learning, 44 percent of students opt to stay fully remote. (MassLive)

An air ventilation expert claims on GBH that three feet of social distancing is good enough for students to return to school.

Fourteen South Shore towns and Blue Hills Regional Technical High School have spent at least $390,693 in taxpayer dollars on John Guilfoil Public Relations services since 2018, according to a Patriot Ledger investigation.

A Berkshire Eagle editorial urges the Baker administration to bump teachers up on the vaccine priority list, but is vague about what kind of bump is needed. Teachers are currently next in line, so presumably the goal is to let them join the 65-plus group that is trying to get vaccinated now.

The Northampton School Committee has a somewhat impromptu debate about banning images of the Confederate flag in city schools. (Daily Hampshire Gazette)

A group challenging Harvard’s consideration of race and ethnicity as a factor in admissions is taking its case to the Supreme Court. (Washington Post)

Mount Holyoke College angers parents, faculty, and staff when it announces plans to close its children’s center, which provides care for children of about 100 families and is used as part of the college’s psychology curriculum. (MassLive)

ARTS/CULTURE

Polar Park in Worcester, the new home of the Worcester Red Sox, will celebrate the team’s first game in the new stadium on April 13 before 1,140 fans, under Gov. Baker’s new reopening plan. (Telegram & Gazette)

CRIMINAL JUSTICE/COURTS

A Massachusetts state trooper accused of assaulting his girlfriend in New Hampshire remains behind bars after a judge denies bail. (Eagle-Tribune)

MEDIA

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