The Small Business Administration is urging small businesses owned by women and minorities to apply for Paycheck Protection Program loans.
When President Joe Biden took office, he made some changes to the PPP aimed at getting more money into the hands of businesses that have one employee — the owner.
Many such businesses are owned by women and minorities, two groups that officials admit have received a disproportionately smaller share of PPP money.
Rachel Stephens is among those seeking help. She grows herbs on a small farm in Southold and uses them to produce herbal drinks, oils and tonics. As the sole owner of a business, she says she needs all the help she can get.
“I need to pay the lease for my farmland, I need to pay for my rental time in the commercial kitchen, I need to put in a big order for the jars and packaging I sell my products in, says Stephens.
The smallest of businesses are now allowed to use their gross receipts when applying for a loan as opposed to their net profits. That way, they’re eligible for higher loan amounts, which are usually forgivable.
“So for example, if a business grosses $100,000 but nets $10,000, they would’ve gotten their loan based on the $10,000 figure,” says John Mallano, of the SBA. “Now with the new calculation they’ll be able to get a loan based on the $100,000 figure.
Kevin O’Connor, CEO of Dime Community Bank, says just the announcement of the changes helped spread the word about the PPP program which many small businesses are still unsure about.
“The notification the government made that that was their goal got some people to think about it again, which is a very positive thing,” says O’Connor. “Again all of this is about helping smaller businesses get to the other side.”
More than $140 billion in loans have been granted to small businesses this year alone under the PPP plan.
This program expires March 31, but the House just voted to extend it two months and the Senate is expected to follow suit.