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One year ago today, during the early stages of the pandemic, this Committee held our first hearing on the impact of COVID on small businesses. Since that hearing, our Committee has been working relentlessly to get them the aid they need to make it through this crisis.

One of Congress’s earliest and most effective means of distributing relief to small businesses was through the Paycheck Protection Program. Congress created PPP through the CARES Act to provide fully guaranteed, forgivable loans to meet payroll costs and other business expenses. Today, PPP is still providing urgently needed funding. The program accepts applications for first and second draw loans and has approved 2.1 million loans totaling $156.2 billion during 2021. The high level of demand for PPP loans is a testament to the program’s effectiveness and the lingering impact of the pandemic. It’s clear that small businesses still need help but lingering issues in the program have led to the need for Congress to consider a short-term extension beyond March 31.

Across the country, case counts, hospitalizations, and deaths are trending in the right direction. At the same time, we are vaccinating millions of Americans daily. This is cause for optimism, but it does not mean this crisis is over. The pandemic has caused unprecedented harm for small businesses, and it would be a mistake to withdraw support abruptly. Congress must work to understand the current realities facing small business owners and extend PPP to meet their needs.  

We also must continue to address the persistent issue of inequity within the program. In the beginning, larger businesses with ties to big banks received loans at the expense of the smallest businesses. We have instituted numerous reforms to empower community lenders to spread relief to underserved businesses. The Biden administration also took decisive action to get funding to small businesses that have previously been neglected. On February 22nd, President Biden announced the implementation of a 14-day exclusivity window for small businesses with fewer than 20 employees. The President also acted to get more money to sole proprietors, made formerly incarcerated individuals and those with federal student loan delinquencies eligible for PPP, and clarified the use of ITINs.

I’m pleased to report that these changes have been effective in getting money to smaller businesses. According to the Biden administration, there has been a 20 percent increase in loans approved to minority-owned businesses, A 14 percent increase in loans approved to women-owned businesses, and a 12 percent increase in loan approved to businesses in rural areas. During the exclusivity period, SBA has served more than 400,000 small businesses with fewer than 20 employees, nearly 200,000 of which are first-time PPP borrowers. This is meaningful progress and a sign of the impact that deliberate reforms can have on businesses that are often neglected.

Today’s hearing is timely, I hope that it will give us the opportunity to examine the impact the Biden administration’s reforms have made on small business owners and lenders and help us identify ongoing challenges we continue to hear about from borrowers and lenders alike. I look forward to hearing from our panelists about the current state of PPP and their recommendations on the program’s future.