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Biden administration officials and lawmakers who focused on the Democrats’ $ 1.9 trillion relief bill, which includes an additional $ 7 billion for the PPP, have failed to address these concerns , but would not extend the program. Members of Congress are just starting to work on a potential extension, but with some $ 120 billion in PPP funding remaining, it is not certain that they will act quickly to resolve the issue, fueling confusion among lenders. responsible for granting aid.
“They don’t have answers,” said David Pommerehn, general counsel for the Consumer Bankers Association. “They are preparing for the worst-case scenario, and it’s the program that comes to a complete halt on March 31 at 11:59 am.”
The uncertainty marks the latest drama surrounding the massive Covid-19 relief program, which has granted nearly 7.6 million loans to employers since its inception in March 2020. Loans are popular because they can be canceled if employers agree to continue paying employees. But since its inception, PPP has been a roller coaster for borrowers and lenders alike due to ever-changing rules and shifting timelines.
President Joe Biden and White House officials took a victory lap on Tuesday over recent changes they made to help ensure smaller businesses have access to PPP, with the president visiting a Washington hardware store that received help.
But the White House message – including a comment from a senior National Economic Council official that there is still plenty of time to apply – failed to capture the reality that PPP lenders are pulling back and not adopting not universally the rules Biden is committed to helping more small businesses. get funds.
Rachel Ball, a sole proprietor who owns a corporate events business, was one of the Chase PPP contenders informed Monday afternoon that the bank would not pass the new rules that would allow businesses like hers to qualify. for more money. Ball, who uses Chase for their business banking services, now has the choice of taking a bet on another lender over time or settling for a smaller loan under the old rules.
“I feel like I’m in limbo,” Ball said.
Chase spokeswoman Anne Pace said the bank supports calls for a PPP extension and will implement Biden’s changes if an extension goes through. Pace said each request can take weeks to pass the approval and funding stages, and the bank is focusing on the high volume of requests in its pipeline before the month is out.
Chase’s comments echo those from banking trade associations urging Congress and the Small Business Administration, which manages the PPP, to find a way to let them continue processing applications after March 31.
Banks have warned that the SBA’s decision to strengthen anti-fraud measures this year has introduced further delays in the application pipeline due to the time taken to resolve issues reported by the agency after reviewing loan applications. . Bank of America, which will stop receiving applications on Tuesday, said it had 30,000 pending and wanted to allow enough time for each to go through the SBA by March 31.
In a March 5 letter to lawmakers, the American Bankers Association and other lender groups said they had “serious concerns” about the number of PPP loans stuck in the SBA’s application system that would remain. pending until March 31. new loans submitted to the SBA this month will be left on hold when the SBA system shuts down.
The National Association of Government Guaranteed Lenders proposes that Congress create a “double deadline” that would require applications to be submitted by April 30 and then approved by May 31, with the last month being used to resolve issues that delay loans.
The Bank Policy Institute and the Consumer Bankers Association, which represent the main PPP lenders, ask the SBA to allow the processing of loan applications that triggered error messages and “hold codes” by banks and the SBA at least until June. 30. The agency could implement the proposal by granting “conditional” approval and committing funds for applications submitted by March 31.
“It would help thousands of eligible borrowers whose applications are or will be subject to no-fault administrative delays,” the two groups said in a March 3 letter to the SBA.
“[I]From the experience of our members, many of the smaller borrowers, and therefore those who typically need PPP loans the most, tend to have more SBAs than the larger borrowers, ”they wrote. . The administration and the SBA have identified as needing greater and more streamlined access to funds, which are most at risk of losing access to funds. “
The SBA and Congress are starting to report that they will be working on a fix.
A spokesperson for the SBA said the agency has not decided whether it can continue to process a pending application after the March 31 deadline for approvals has passed. Patrick Kelley, associate administrator of the SBA’s Office of Access to Capital, which manages the PPP, told small businesses on Monday during a webinar that the agency was working on an “administrative solution” to enable PPP applicants to receive funds after the program expires. As the issue had not been resolved, his advice to companies was to “don’t wait” to apply.
Lawmakers are starting to support an extension of PPP. Nydia Velázquez (DN.Y.), president of the house’s small businesses, wants a three-month renewal. Senator Jeanne Shaheen (DN.H.), a member of the Senate Small Business Committee, said that “extending the P3 deadline is a common sense step that we can and must take.”
“Small businesses are still feeling the effects of the pandemic and there is a great demand for the PPP program,” Velázquez told POLITICO. “With the PPP expiring at the end of the month, I am working diligently with Senate and administration leaders to reach agreement on expanding PPPs in a way that meets the needs of small business owners. “
It is unclear how the House and Senate leaders will proceed. Spokesmen for House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer did not answer questions about whether they too would support the PPP prosecution.
A White House official who declined to be named said if Congress wanted to extend the PPP deadline, “we are open to discussing a way forward with them.”
“At the moment, we are focused on providing relief funds quickly and fairly in the time we have left,” the White House official said, adding that the administration was also focusing on passing the bill. Biden’s Aid Law, which includes relief for small businesses.
Some Republican lawmakers are ready to work on an extension of the program, according to aides and lobbyists. Business groups are trying to present the issue as a bipartisan victory after the party line’s massive struggle over Biden’s relief bill.
“What better way to reach Republicans who feel burnt by the promises of bipartisanship than to look into helping small businesses?” said Matthew Haller, chief lobbyist at the International Franchise Association.
Representative Chip Roy (R-Texas), who led work on legislation last year to revamp an earlier version of the PPP, would support an extension, a spokesperson said. Rep. Blaine Luetkemeyer (R-Mo.), Senior Republican on the House Small Business Committee, said in a statement that PPP “has helped millions of small businesses since its inception, and as vaccines have become more common. widely available and states were beginning to open up, we need to responsibly consider the future of the program. “
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