Now, some advocacy groups are warning that the funding gap could leave thousands of small businesses on the sidelines and that Congress must spend billions more, especially to help those that Biden promised to support with more generous loan terms implemented last month.
“It is unfair that the smallest companies are closed in the final hours,” said Erik Asgeirsson, an executive at the American Institute of CPAs, which calls for more PPP funding. “Many false hopes have been raised.”
The sudden shift to a new discussion of PPP funding right after a debate on expanding the enrollment window highlights the challenges that lawmakers faced in trying to understand the operations of the program, one of the biggest of all Covid-19 relief measures. . Congress was unable to obtain data on how many jobs the program saved, for example, or the extent to which loans reached companies owned by people of color and women. And it is not the first time that he has run out of money, just to make lawmakers struggle to allocate more.
About $ 960 billion has been appropriated for PPP, and the program has provided more than $ 746 billion in forgiving loans to 9 million borrowers since last April. It is one of the most popular Covid-19 relief programs, despite funding challenges, ever-changing rules and concerns about fraud. Acceptance has been widespread in part because companies can have government-backed debt eliminated if they spend most of the money on payroll.
The policy for discussing financing is likely to be more difficult than last year, as the US economy shows signs of rapid recovery from Covid-19. But supporters say this is no reason to end support for small businesses that are still struggling to take advantage of the country’s reopening.
“The job growth spurred by the vaccine indicates that yes, we see light at the end of this very dark tunnel,” said Rebecca Shi, executive director of the American Business Immigration Coalition, which asks for more funding. “But, like masks, we shouldn’t give up on PPPs, especially for smaller debtors and rural companies to recover and rebuild.”
Last month, lawmakers rushed to negotiate and pass bipartisan legislation to delay the program’s application deadline to May 31 from March 31 amid widespread concerns that many employers seeking help would be left out.
The old deadline became an urgent problem after new SBA fraud analysis slowed the loan application process, threatening to leave applicants in limbo.
The original March 31 cut also became a problem because Biden had just enacted new rules to ensure that loans reached the smallest and most affected companies that had long struggled to gain access to the program, including freelancers, business owners with criminal records and those with student loan defaults.
The decision to postpone the deadline, along with the move to expand access, hindered plans made by Congress last year about how long the remaining PPP funding would remain available.
The SBA first revealed the potential funding gap at the end of last month, when a PPP official told the Senate Small Business Committee that the money available for loans would likely run out in mid-April.
Now, the money may run out long before Congress has time to fully consider the appropriation of new funds. Lawmakers left Washington last month and are not scheduled to return until next week.
The issue of funding also creates complications for other changes that lawmakers planned to make to the program.
One of the major updates that lawmakers have been considering would allow self-employed business owners to retroactively increase the size of their existing PPP loans, if they received them before Biden changed the rules last month.
The move would further increase the demand for PPP money.
Senate Small Business President Ben Cardin (D-Md.), Who has been working with Republicans on legislation to revise the PPP rules, “would also be open to a bipartisan effort to add funds to the program,” said a spokesman. -voice.