With nearly 40% of the funds allocated by Congress remaining in December, legislators approved another 7 7 billion for funding in the week’s week 1.9 trillion Covid Relief Bill, which was signed into law last week. But if the March 31 deadline is not pushed back, some of the extra funding will be used.
There is bipartisan support for legislation that extends the program until May 31 and provides an additional 30 days for small business administration to process applications that are still pending. The House voted 4115–3 to pass the bill Tuesday, but the Senate will still need to pass the allied part of the law.
There are many reasons why there is so much money left. Demand has slowed as the economy has slowly recovered, but lenders say the process of finding new frauds has put thousands of applications in limbo for weeks. Plus, Exclusivity Windows has blocked some large businesses from applying for a certain period of time, opening eight weeks from the beginning of this year.
The rule varies
When the program first began last year, Congress made changes aimed at helping hard-hit industries get access to money instead of quickly getting large loans instead of chain stores and rest restaurants rent.
When legislators reopened access to the program in December, billions of dollars were created for community development financial institutions, which typically lend to minority-owned businesses in less-populated communities and businesses with fewer than 10 employees.
The Biden administration made more abrupt changes in February. With a three-day notice, it will have a two-week special window for small businesses with less than 20 employees to apply for funding, blocking large employers in the meantime. He also increased eligibility. Self-employed, sole proprietors and independent contractors are now eligible for more money, as well as offenses against business owners, their federal student loans and some non-citizen residents with non-fraud related offenses.
But in some ways, changes to the second round of loans have also made eligibility more restrictive. Businesses should show a reduction of at least 25% in total acquisitions in the first, second or third quarter of this year compared to the same quarter in 2019. Those who employ more than 300 workers are excluded.
According to Hilda Kennedy, who spoke at a House hearing last week on behalf of the National Association for the Development of Small Communications Business Group, there are still issues with error messages and holdings and it is difficult to get a return call or email. Lender.
Who has been helped
Last year, the program approved more than .. 7.6 million in loans between April and August Gust. Since it reopened in January for new first-time applicants and a second loan, about 2.4 million loans have been valued at about 5 165 billion as of March 7.
Loans are waived if at least 60% of the money in the business is spent on parole costs – although business owners will have to apply for cancellation. About 3 million people have yet to submit an apology.
Businesses are still struggling
Small business advocates and lenders say the program provides significant help to struggling industries and is urging Congress to extend the deadline. With the number of small businesses open in the United States still down 32% since January 2020, the Harvard-based research group is tracking recovery, according to Opportunity Insights.
In a letter to the legislators, the National Federation of Independent Businesses wrote, “The current timeline for access to the PPP program has been cut short and the state of economic recovery is not taken into account.”
The group notes that a number of small businesses are still assessing their needs in light of changing circumstances. Some business owners say the loan has only provided a one-stop-gap in a year-long epidemic. Each loan is only meant to cover a few months of expenses.
The story has been updated to note that the House has passed legislation to increase the program.
CNN Ni Gini Sahadi contributed to the report.
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