A small business owner in Chinatown, San Francisco
Source: CNBC
Time is ticking for the smallest businesses to access the priority application period for the Small Business Administration’s Paycheck Protection Program.
But these businesses, along with small businesses of all sizes, will still be able to apply for loan forgiveness outside of the priority window.
The 14-day priority window announced by the Biden-Harris administration last month ends today, March 9, 5 p.m. ET. During these two weeks, only businesses with fewer than 20 employees could apply for loan waivers through PPP, a special period targeting women and helping minority businesses access funds.
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Even after this window is closed, these companies will still be able to apply for and receive funding through the program. While they may compete with larger companies for cash, lenders don’t expect the program to run out of cash before the March 31st expiration date.
This year, through March 7, the SBA had approved more than 2.4 million PPP loans totaling nearly $ 165 billion. That’s about 58% of the $ 284 billion allocated to the program when it reopened in January.
“We might exceed $ 200 billion, but I think there will probably be $ 50 to $ 75 billion left,” said Sam Sidhu, Customers Bank’s chief operating officer, headquartered in Phoenixville, Pennsylvania.
The smallest companies can still apply
That’s important for the smallest businesses who wanted to take advantage of the application priority window but delayed submitting paperwork.
While the special filing period opened on February 24, the opportunity for those struggling with student loan debt, convictions for non-fraud crimes or non-citizen owners was increased only in the first week of March, causing confusion for some . An updated loan calculation formula that meant more money for companies with an IRS Form 1040 Schedule C was not announced by the SBA until March 3.
Furthermore, the administration was not ready to process forms with the new calculation formula until March 5, which meant that sole traders had little time to access the priority application period.
But these companies can still apply before the program deadline, Sidhu said, and shouldn’t think they won’t get a loan because they missed the priority window.
Take the deadline into account
A concern for many lenders is the March 31st expiration date of the entire program.
“The approaching March 31 deadline is a much bigger problem,” said Chris Hurn, CEO of Fountainhead Commercial Capital, a non-bank lender. He added that he is concerned that the date is not enough time for all small businesses to take advantage of the new rules or request additional funding rounds, which could be critical to their survival.
In addition, lenders are also under pressure to process everyone’s loans as quickly as possible, which has been difficult with changing rules.
“Everyone’s bandwidth has expanded enormously over the past year with this program,” said Hurn.
So far, the Biden administration has not indicated that the program would be extended, a move that should be approved by Congress.
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