Lawmakers rush to extend PPP to May as its last date nears
Small business scores that were squeezed due to the Covid-19 pandemic found themselves shut out of a popular federal assistance program.
From March 31, the Paycheck Protection Program, which was created by Congress a year ago to help locally owned stores, restaurants, and service providers survive the crisis, will stop taking applications.
“No applicant should be left stranded because of bureaucratic red tape,” Alice Frazier, president, and CEO of the Bank of Charles Town (in West Virginia) told the House Small Business Committee Wednesday.
The upcoming deadline has the bipartisan support of federal lawmakers hurrying to pass legislation extending the PPP at least through May.
The Senate Committee on Small Business & Entrepreneurship chairman Maryland Democratic Sen. Ben Cardin said, “It’s clear that the most vulnerable small businesses will need help beyond March 31, so we must pass this extension as quickly as possible.”
Cardin is co-sponsoring a bill with Republican Susan Collins of Maine and Democrat Jeanne Shaheen of New Hampshire that would give the Small Business Administration until May 31 to accept applications and until June 30 to process them.
The PPP comes as part of the CARES Act that was approved in March 2020 by Congress. It helped firms employing 500 or fewer workers with low-interest loans of up to $10 million (that often turned into grants) to cover their pandemic-related costs.
Congress has kept refining the program and has targeted the smallest of companies, allowing the hardest-hit firms to take out a second loan.
American Rescue Plan by the Biden administration passed by Congress last week includes another $7.25billion for the program. But not extending the PPP loan deadline could spell doom for thousands of businesses facing a crisis.
According to the National Federation of Independent Businesses, 15% of small-business owners say that they will have to shut their doors if current economic conditions do not improve over the next six months.
“The PPP will continue to play a vital role for many small businesses to keep employees on payroll and assist with certain business expenses,” wrote Kevin Kuhlman, NFIB vice president for federal government relations in a letter to congressional leaders.
