Lawmakers push short-term extension of Paycheck Protection Program

A bipartisan group of lawmakers announced legislation on Thursday to give businesses two additional months to apply for Paycheck Protection Program funds ahead of an end-of-month deadline.

The legislation would extend the deadline for businesses to apply for PPP loans from March 31 until May 31 and give the Small Business Administration an additional 30 days to process loans submitted before the new deadline.

“The demand for PPP loans right now is a testament to the program’s effectiveness and the lingering impacts of this pandemic,” said Rep. Nydia Velázquez, the New York Democrat who chairs the House Small Business Committee. “That’s why we cannot cut off aid now and this short-term extension is so important.”

The program facilitates low-interest loans for businesses that are forgiven as long as companies use a certain amount on payroll.

Since Congress set it up last March, the program has helped facilitate more than 7.5 million loans totaling more than $687 billion.

Ms. Velázquez rolled out legislation to extend the program along with Rep. Blaine Luetkemeyer of Missouri, the top Republican on the small business committee; Rep. Young Kim, California Republican; and Rep. Carolyn Bourdeaux, Georgia Democrat.

Senate Small Business Committee Chairman Ben Cardin, Maryland Democrat, announced companion legislation in the Senate along with Sen. Susan Collins, Maine Republican; and Sen. Jeanne Shaheen, New Hampshire Democrat.

Business groups, including the U.S. Chamber of Commerce, have pushed for an extension.

Some banks have reportedly started setting self-imposed deadlines earlier than March 31 to avoid a crush of applications and processing at the end of the month.

The White House has said it’s open to an extension depending on how much of the authorized money is left at the end of March.

Since the program reopened in January with $284 billion in newly available funding, there have been more than 2.4 million loans collectively totaling more than $164 billion, according to the SBA.

President Biden’s $1.9 trillion coronavirus relief package he signed into law on Thursday includes an additional $7 billion for the program and opens it up to certain nonprofits but does not extend the expiration date.

Last month, Mr. Biden announced some changes to the existing program, including a two-week period where only companies with fewer than 20 employees were allowed to apply.

Bharat Ramamurti, deputy director of the National Economic Council, said this week that during the two-week period, which ran from Feb. 24 through Tuesday, there was an uptick in loans to small firms, minority-owned and women-owned companies, and first-time applicants compared to the time period immediately before.