With Just Over Half Of PPP Funds Approved For Loans, Legislators Aim For Extension

A potential deal to lengthen the Small Business Administration’s (SBA’s) Paycheck Protection Program (PPP) is in progress ahead of the initiative’s current March 31 deadline, CNBC reported.

Legislators from both sides of the aisle on Thursday (March 11) unveiled the Paycheck Protection Program Extension Act. The law would provide a new May 31 deadline for the program and let the SBA keep processing applications in progress for further 30 days beyond then.

The PPP has given the green light to 2.4 million loans for almost $165 million overall from the beginning of the year up to March 7, which is a bit more than half of the $284 billion set aside for the program at the time it opened again in January.

However, many have been concerned that the present March 31 deadline does not offer sufficient time to assist small companies that require help to access the funds in light of the initiative’s recent rule modifications and ongoing technical challenges in sending in applications.

In particular, the nearing deadline presents a challenge for sole proprietors. These businesspeople became subject to a new loan calculation formula that was unveiled toward the end of February but only became effective on March 5.

A number of businesses that might have been rewarded by the rule put in their applications too early or might have lacked sufficient time to benefit from the rule prior to the conclusion of the program.

Ten banking organizations wrote to legislators last week seeking additional time, while the American Institute of Certified Public Accountants referred to the current deadline as one that is not realistic and requested a minimum of 60 additional days.

Almost eight in 10 Main Street Survivors — small to mid-size businesses (SMBs) across the U.S. that have found resourceful ways to stay afloat — opted not to apply for PPP loans in the last three months, according to new PYMNTS data. A number of the smallest Main Street SMBs that have not applied in the past three months said they laid off employees instead.

According to PYMNTS’ 2021 Main Street Business Survivor Study, “PPP loans can provide financial support to Main Street Survivors struggling to make ends meet, but the second round of PPP funding, which was rolled out in January, placed tighter restrictions on applications than the first, initially only accepting applications from businesses that could demonstrate that they had suffered at least a 25 percent loss in revenue. This resulted in far fewer applications.”