+1 (216) 269 3272 Pierre@profilenewsohio.com
Carmen Reinicke
@CSREINICKE

As the March 31 deadline
for the Small Business
Administration’s Paycheck
Protection Program looms, a
deal to extend it for two more
months is in the works.

 

A bipartisan group of
lawmakers on Thursday
introduced the Paycheck
Protection Program
Extension Act in the House
of Representatives, which
would push the expiration
date to May 31 and give the
SBA authority to continue to
process pending applications
for another 30 days after that.

 

The bill, introduced by House
Small Business Committee
Chairwoman Nydia
Velazquez, D-N.Y.; Rep. Blaine
Luetkemeyer, R-Mo., Rep.
Carolyn Bourdeaux, D-Ga.;
and Rep. Young Kim, R-Calif.,
comes after a slew of calls
from lenders, businesses and
other advocates to extend PPP.

 

Later Thursday, a companion
bill with the same stipulations
was introduced in the Senate,
sponsored by a bipartisan
group including U.S. Senate
Committee on Small Business
& Entrepreneurship Chair
Ben Cardin, D-Md., Sen. Susan
Collins, R-ME, and Sen. Jeanne
Shaheen, D-N.H.
“Many small-business owners,
especially the self-employed,
are just now trying to access
the program for the first time,
so giving small businesses
more time to take advantage
of an important lifeline like
PPP is not only the right thing
to do, it’s the necessary thing
to do,” said Small Business
Majority founder and CEO
John Arensmeyer.

 

Growing calls to
extend PPP

This year through March 7,
the program has approved 2.4
million loans totaling nearly
$165 billion, just over half
of the $284 billion allocated
to the program when it
reopened in January.

 

But, given the program’s
recent changes to eligibility
and calculation rules, as well
as continued technical issues
in submitting applications,
many worried there wouldn’t
be enough time to help small
businesses that need help
access the money.

 

Last week, 10 banking groups
sent a letter to lawmakers
asking for more time. In its
own statement Friday, the
American Institute of Certified
Public Accountants called the
March 31 deadline unrealistic
and asked for an extension of
at least 60 days.

The U.S. Chamber of
Commerce has called for
the program to be continued
through the end of the year,
and a group of more than
100 trade organizations has
asked lawmakers to extend
PPP until at least June 30.

 

New rules added
confusion

The swiftly approaching
deadline is especially an
issue for sole proprietors,
who became subject to a
new loan calculation formula
that was announced in late
February but didn’t go into
effect until March 5, when
the SBA was ready to accept
applications under the
updated guidelines.

 

Many of the businesses that
might have benefitted from
the rule either missed the
opportunity because they
applied too early or may not
have enough time to take
advantage of the new rule
before the program lapses.

 

Adding to the confusion was
the 14-day priority window
the Biden administration
announced that ran from
Feb. 24 through March 9.
While the period was aimed
at the smallest firms that
had been left out of earlier
rounds of funding, such as
minority and women-owned
businesses, it was misaligned
with the other changes
Biden’s team made to the
program.

 

“So many of the Schedule C
filers missed the opportunity
for higher PPP loan in
the first round and are in
danger of missing out on
this round of funding since
it took until March 3 to get
the new forms,” said Hilda
Kennedy, founder and
president of AmPac Business
Capital, a PPP lender, during

a Wednesday hearing with the
House Small Business Committee.

“Time is not on our side; these
businesses need a little more help
and they’re willing to do the work,”
she said.

 

Lenders need more
time

Because of the short timeline
before the end of the program,
some lenders are not offering the
new calculation at all.

 

JP Morgan Chase will calculate
Schedule C filers through the old
formula and will close applications
on March 19. Wells Fargo said that
it will update its systems to reflect
the new rule for sole proprietors
but will stop accepting new
applications on March 23. Bank
of America stopped taking new
applications on Tuesday.

 

In addition, lenders are worried
that they won’t have enough
time to process loans and get
borrowers final approval by
the March 31 deadline. The
second iteration of PPP included
heightened security measures to
protect against fraud but slowed
down the application process.

 

“That why having that extra time
would be important,” said Sam
Sidhu, chief operating officer
of Customers Bank, which is
headquartered in Phoenixville,
Pennsylvania. “Working
backwards from the 31st, it might
meant that most applications
would need to be submitted by the
15th or 29th to have a chance to
get done.”

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