Owner of a small business in Chinatown, San Francisco
Source: CNBC
Time is passing for smaller companies to access the priority application period of the Small Business Administration Payroll Protection Program.
But these companies, along with small businesses of all sizes, will still be able to apply for forgivable loans outside the priority window.
The 14-day priority period announced by the Biden-Harris administration last month ends at 5pm today, March 9th. During these two weeks, only companies with less than 20 employees could apply for forgivable loans through PPP, a special period aimed at helping women and minority companies access the funds.
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Even after closing this window, it will still be possible for these companies to apply for and receive funding through the program. While they can compete with larger companies for cash, lenders don’t expect the program to run out of money before the March 31 expiration date.
This year, as of March 7, the SBA had approved more than 2.4 million PPP loans totaling about $ 165 billion. That is, about 58% of the $ 284 billion allocated to the program when it reopened in January.
“We could cross $ 200 billion, but I think there will probably still be $ 50 billion to $ 75 billion left,” said Sam Sidhu, chief operating officer of Customers Bank, based in Phoenixville, Pennsylvania.
Smaller companies can still apply
This is important for smaller companies that wanted to take advantage of the priority application window but delayed the submission of paperwork.
For example, while the special application period opened on February 24, eligibility was extended to those who had problems with student loan debt, had convictions for non-fraudulent offenses, or were homeowners. ‘non-citizen companies that did not enter into force until the first week of March. causing confusion for some. It was not until March 3 that the SBA announced an updated loan calculation formula that meant more money for companies with a C-list on Form IRS 1040.
Beyond that, the administration was unprepared to process forms with the new calculation formula until March 5, leaving exclusive owners little time to access the priority application period.
But these companies can still apply before the program deadline, Sidhu said, and they shouldn’t think that because they lost the priority window, they won’t get a loan.
Please note the deadline
The March 31 expiration date of the entire program is worrisome for many lenders.
“The March 31 deadline is a much bigger problem,” said Chris Hurn, chief executive of Fountainhead Commercial Capital, a non-bank lender. He added that he is concerned that the date is not long enough for all small businesses to take advantage of the new rules or apply for additional rounds of funding, which could be crucial to their survival.
In addition, lenders are also under pressure to process everyone’s loans as quickly as possible, which has been difficult with the change in rules.
“Everyone’s bandwidth has already expanded tremendously over the last year with this program,” Hurn said.
So far, the Biden administration has not indicated that the program be expanded, a move that should be approved by Congress.
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