Smaller businesses can still apply for the Paycheck Protection Program –

Smaller businesses can still apply for the Paycheck Protection Program

Small business owner in Chinatown, San Francisco

Source: CNBC

Time is running out for smaller 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 forgivable loans outside of the priority window.

The 14-day priority window announced by the Biden-Harris administration last month ends at 5 p.m. ET today, March 9. During these two weeks, only companies with fewer than 20 employees can apply for forgivable loans through PPP, a special period designed to help women and minority-owned businesses access funds.

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Even after this window closes, it will still be possible for these companies to apply for and receive funds through the program. While they may be competing with larger firms for cash, lenders don’t expect the program to run out of money before the March 31 due date.

This year, as of March 7, the SBA had approved more than 2.4 million PPP loans for a total of nearly $ 165 billion. That’s about 58% of the $ 284 billion allocated for the program when it reopened in January.

“We could top $ 200 billion, but I think there will probably still be between $ 50 and $ 75 billion left,” said Sam Sidhu, chief operating officer for Clientes Bank, which is based in Phoenixville, Pennsylvania.

Smaller companies can still apply

That’s important for smaller businesses that wanted to take advantage of the priority request window but were slow to submit documentation.

For example, while the special application period opened on February 24, the expanded eligibility for those who had struggled with student loan debt, had non-fraudulent felony convictions, or were non-citizen business owners did not go into effect. until the first week of March, causing confusion for some. The SBA didn’t announce an updated loan calculation formula that meant more money for businesses with an IRS Form 1040 Schedule C until March 3.

Beyond that, management wasn’t ready to process forms with the new calculation formula until March 5, leaving sole proprietors with little time to access the priority application period.

But these companies can still apply before the program’s deadline, Sidhu said, and they shouldn’t think that because they missed the priority window they won’t get a loan.

Be aware of the deadline

Many lenders are concerned about the March 31 expiration date of the entire program.

“The looming 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 will not be long enough for all small businesses to take advantage of the new rules or request additional rounds of financing, which could be crucial to their survival.

Additionally, 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 already been greatly expanded in the last year with this program,” Hurn said.

So far, the Biden administration has given no sign that the program will be extended, a move that would have to be approved by Congress.

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