A week after accounting and financial services trade groups
The Paycheck Protection Program Extension Act, which counts among its sponsors Rep. Nydia Velazquez, D-N.Y., the Small Business Committee’s chairwoman, and Rep. Blaine Luetkemeyer, R-Mo., its ranking member, would extend PPP lending to May 31. The bill would also give the Small Business Administration an additional 30 days beyond that to process applications submitted up to the lending deadline.
“The demand for PPP loans right now is a testament to the program’s effectiveness and the lingering impacts of this pandemic,” Velazquez said in a press release. “That’s why we cannot cut off aid now and this short-term extension is so important.”
“This bipartisan legislation will provide a commonsense extension to the Paycheck Protection Program and the tools for Main Street USA to contribute to their local economies once again,” Luetkemeyer added in the press release.
Rep. Young Kim, R-Calif., and Rep. Carolyn Bourdeaux, D-Ga., are also sponsoring the extension bill.
Late Thursday, a bipartisan group of senators, led by Sen. Ben Cardin, D-Md., chairman of the Senate’s Committee on Small Business and Entrepreneurship, introduced an identical bill in that chamber. Sen. Susan Collins, R-Maine and Sen. Jeanne Shaheen, D-N.H., joined Cardin in sponsoring the Senate legislation.
“With the ongoing distribution of COVID-19 vaccines, there is a light at the end of the tunnel, but we’re not there yet,” Collins said in a press release. “By extending the PPP, our bill would help our nation’s small employers retain access to forgivable PPP loans.”
The two bills were introduced a day after final passage of a $1.9 trillion stimulus plan that includes $7.25 billion in additional PPP funding, boosting total funding for the program to $814 billion. They also follows a House Small Business Committee
Several advocacy groups, including the American Bankers Association and National Association for the Self-Employed, were quick to jump on the extension bandwagon Thursday.
“The bipartisan legislation introduced in the House today is directly in line with what we are hearing from our members across the country,” NASE President and CEO Keith Hall said in a press release.
According to Hall, 88% of NASE members who participated in a recent survey indicated they supported additional stimulus, including expanded PPP lending.
"Banks welcome this effort by lawmakers to extend the program and ensure that struggling small businesses have every opportunity to see their PPP loans processed and approved," said Ian McKendry, an ABA spokesman. "Right now, some businesses may be at risk because the SBA approval process is taking some time. By extending this program, even briefly, it will give more small businesses the chance to successfully access this financial lifeline."
Last month, the Biden administration adjusted the PPP funding formula for self-employed borrowers to calculate loan amounts off gross income rather than net profits. However, the interim final rule implementing the change took until March 3 to complete.
Extending PPP lending authority through May would give lenders more time to serve the tens of millions of self-employed entrepreneurs who are eligible for the more generous funding.
The new stimulus law provides $175 million to create a corps of community navigators whose job will be increasing awareness of and participation in COVID relief programs, including PPP.
Extra time will also give the SBA a better opportunity to remedy the system issues that have blocked lenders from uploading some loans onto the agency’s loan processing platform and slowed the processing of others affected by numerous error code messages.
Through Sunday, the SBA said it had approved 7.6 million PPP loans for $687.4 billion.
This story has been updated to include the Senate's introduction of companion legislation.
