Lawmakers strike bipartisan deal to extend small business loan program
Senior House and Senate lawmakers have reached an agreement to extend the Paycheck Protection Program for two months amid growing concern that the March 31 expiration of the landmark small business-rescue plan would deprive many employers of aid.
The deal first announced by House Small Business Chair Nydia Velázquez (D-N.Y.) and Rep. Blaine Luetkemeyer (R-Mo.), the committee's top Republican, would delay the PPP's loan application deadline to May 31. It would also give the Small Business Administration authority to continue processing pending applications for 30 days after that date.
The agreement has bipartisan backing in the Senate, where Small Business Chair Ben Cardin (D-Md.) is pushing companion legislation to the House plan with fellow committee members Sens. Susan Collins (R-Maine) and Jeanne Shaheen (D-N.H.).
The PPP, the source of more than $687 billion in pandemic relief, offers government-backed small business loans that can be forgiven if employers agree to maintain payroll.
The House will vote on the bill next week, a senior Democratic aide said, before members leave Washington until mid-April. The biggest hurdle in enacting the bill would be the Senate, where it would likely need unanimous agreement to expedite passage and avoid a lengthy floor debate.
But in a sign of potentially broad bipartisan support, the House will take up the bill using an accelerated procedure requiring support from two-thirds of members.
The delayed deadline would provide relief to businesses seeking PPP aid as well as to lenders responsible for submitting loan applications to the SBA.
The loan approvals have become a lengthy affair this year because of new SBA fraud reviews that have delayed thousands of applications for weeks at a time. Some banks, including Bank of America, have stopped accepting applications because of concerns about clearing the loans through the SBA before March 31.
The deadline also threatened to limit the number of businesses that could take advantage of new Biden administration rules designed to expand PPP access to the self-employed as well as business owners with felony convictions and federal student loan delinquencies.
The hurried bipartisan effort on the heels of a major party-line fight over President Joe Biden's $1.9 trillion pandemic relief plan underscored a growing sense of urgency to address the PPP deadline.
In a statement, Cardin said, "it’s clear that the most vulnerable small businesses will need help beyond March 31, so we must pass this extension as quickly as possible."
Rep. Carolyn Bourdeaux (D-Ga.), who introduced the extension proposal in the House, said the authors of the bill had "extensive conversations" with their Senate counterparts before offering the legislation.
"There is a very broad recognition we need to give our lenders and our small businesses another two months," Bourdeaux said in an interview.
The National Federation of Independent Business said in survey results this week that the number of small business owners expecting better conditions over the next six months was increasing but that major challenges remain. The group found that 40 percent of small business owners in February reported job openings that could not be filled, with significant numbers of people staying home to care for family and to protect themselves from Covid-19.
“The economic recovery remains uneven for small businesses, especially those still managing state and local regulations and restrictions," said Bill Dunkelberg, the group's chief economist. "Congress and the Biden administration must keep small businesses a priority as they plan future policy legislation.”
