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As the March 31 deadline for the Small Business Administration’s Paycheck Protection Program looms, a deal to extend it for 2 extra months is within the works.
A bipartisan group of lawmakers on Thursday launched the Paycheck Protection Program Extension Act in the House of Representatives, which might push the expiration date to May 31 and provides the SBA authority to proceed to course of pending purposes for one more 30 days after that.
The invoice, launched 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, companies and different advocates to extend PPP.
Later Thursday, a companion invoice with the identical stipulations was introduced in the Senate, sponsored by a bipartisan group together with 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.
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“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,” mentioned Small Business Majority founder and CEO John Arensmeyer.
Growing calls to extend PPP
This yr via March 7, this system has accepted 2.4 million loans totaling practically $165 billion, simply over half of the $284 billion allotted to this system when it reopened in January.
But, given this system’s recent changes to eligibility and calculation guidelines, as properly as continued technical points in submitting purposes, many fearful there would not be sufficient time to assist small companies that need assistance entry the cash.
Last week, 10 banking teams despatched a letter to lawmakers asking for extra time. In its personal statement Friday, the American Institute of Certified Public Accountants known as the March 31 deadline unrealistic and requested for an extension of not less than 60 days.
The U.S. Chamber of Commerce has known as for this system to be continued via the tip of the yr, and a gaggle of greater than 100 commerce organizations has requested lawmakers to extend PPP till at least June 30.
New guidelines added confusion
The swiftly approaching deadline is particularly a problem for sole proprietors, who turned topic to a brand new mortgage calculation method that was introduced in late February however did not go into impact till March 5, when the SBA was prepared to settle for purposes beneath the up to date tips.
Many of the companies which may have benefitted from the rule both missed the chance as a result of they utilized too early or might not have sufficient time to make the most of the brand new rule earlier than this system lapses.
Adding to the confusion was the 14-day priority window the Biden administration introduced that ran from Feb. 24 via March 9. While the interval was aimed on the smallest companies that had been disregarded of earlier rounds of funding, such as minority and women-owned companies, it was misaligned with the opposite adjustments Biden’s workforce made to this system.
“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,” mentioned Hilda Kennedy, founder and president of AmPac Business Capital, a PPP lender, throughout a Wednesday listening to 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 mentioned.
Lenders want extra time
Because of the quick timeline earlier than the tip of this system, some lenders aren’t providing the brand new calculation in any respect.
JP Morgan Chase will calculate Schedule C filers via the previous method and can shut purposes on March 19. Wells Fargo mentioned that it’s going to replace its methods to mirror the brand new rule for sole proprietors however will cease accepting new purposes on March 23. Bank of America stopped taking new purposes on Tuesday.
In addition, lenders are fearful that they will not have sufficient time to course of loans and get debtors closing approval by the March 31 deadline. The second iteration of PPP included heightened security measures to shield in opposition to fraud however slowed down the applying course of.
“That why having that extra time would be important,” mentioned Sam Sidhu, chief working 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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