The small business community is calling on Congress to extend the March 31 Paycheck Protection Program loan deadline, warning that “many eligible businesses, independent contractors, sole proprietors, and self-employed people will not be approved” in that time frame.
In a letter to Senate and House leaders, 65 Chambers of Commerce, lenders, small business owners and national trade organizations are calling for the PPP deadline to be extended to June 30.
“There is simply not enough time in the next month for the SBA and ~5,000 lenders to convert rule changes into technical, content, support, and compliance updates and then get new applicants processed, approved, and funded,” the letter states, which includes signatures from companies like Lendio, as well as groups like the Small Business Majority, and the National Small Business Association.
To date, the Small Business Administration, or SBA, has processed 2 million loans in this latest round through 5,100 lenders, totaling $140 billion dollars. The total loan program is funded for $310 billion.
But some of the lenders who signed the letter to Congress say they have hundreds of thousands of backlogged applicants. New rules and changes to the program are causing a lag in processing, they claim.
“Due to additional front-end compliance checks, a time lapse is occurring between when a lender submits a PPP loan application to the SBA and when the SBA provides a loan number back to the lender. Lenders may only proceed to close the loan once the loan number is given,” the SBA said in an email to CNN.
The Biden administration announced an exclusive two-week window for businesses with less than 20 employees to apply for PPP loans, from Feb. 24 to March 10. However, lenders say there is confusion, as many are still waiting on new rules about how sole proprietors may apply for loans – many have less than 20 employees. The SBA says the new rules are due out this week.
That may cause an additional delay in processing, according to small business advocates.
“Many applications will require revisions after new rules are published this week. And another wave of applications is widely expected. We all want small businesses to survive so we can rebuild our communities. Therefore, we ask that you extend the Paycheck Protection Program until at least June 30, 2021,” the letter reads.
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