PPP loan for small business 2021
The Paycheck Protection Program (PPP) was created in 2020 amid the coronavirus pandemic to support businesses that were the hardest hit.
There had been some controversies and criticisms surrounding the funding program, especially as many small black business owners were denied funding between February and April 2020. Nonetheless, the program has been running.
The latest round of the PPP funding will end in exactly two weeks. Small businesses can still apply before March 31. Since the round rolled out in January, the Small Business Administration has approved roughly $165 billion in funding for over 2.4 million loans, with the average loan size being $284 billion.
“We might cross $200 billion, but I think there’s still probably going to be $50 to $75 billion left,” said Sam Sidhu, chief operating officer of Customers Bank, Phoenixville, Pennsylvania.
According to data from U.S. Small Business Administration, there was still approximately $120 billion of unclaimed funds based on loan approvals as of March 7.
The SBA's newest PPP funding is focused on small and minority businesses after advocates and lawmakers claim that minority and women-owned businesses and firms did not receive sufficient funding in the first two rounds of the PPP.
“Expanding equity and opportunity in the Paycheck Protection Program is a top priority for the Biden-Harris Administration,” said Patrick Kelley, associate administrator for SBA’s Office Capital Access, in an email. More than just providing access, the latest data represents a step in the right direction for our agency-wide mission to support the smallest of small businesses – Mom-and-Pop, women- and minority-owned businesses – which will strengthen our communities and help set America’s economy on the right path.”
While the U.S. seeks to get funds across to as many businesses as possible, the March 31 expiration date is of concern to many lenders. Chief executive of Fountainhead Commercial Capital Chris Hurn, explained that the March deadline is a “much bigger problem” and he believes that the date is not enough time for all interested small businesses to take advantage of the new PPP rules or apply for additional funding.
He said that another reason why the deadline may not be feasible is that lenders are under pressure to process all the loans as fast as possible which will be quite tedious.
“Everybody’s bandwidth has been stretched already tremendously for the last year with this program,” Hurn said.
The deadline for PPP applications has been extended several times when the program expired, due to surplus funding. Although no official announcement has been made for an extension beyond March 31, officials are in talks to extend the deadline by two months, CNBC reported. The news outlet reported that a bipartisan group of lawmakers has proposed the Paycheck Protection Extension Act for the purpose of pushing the deadline to May 31. Also, it would allow the SBA authority to keep on processing pending applications 30 days after the proposed expiration date.
The U.S. Chamber of Commerce was reportedly said to have requested a full-year extension of the PPP until the end of the year. Over 100 national and local trade and business groups have requested and signed a letter to top lawmakers in the country, asking for an extension of the deadline until June 30, according to Black Enterprise reports.