Some warning groups are now warning that the decline in funding could set aside thousands of small businesses and that Congress will have to spend billions more, especially to help those Biden promised to support with broader loan terms implemented last month.
“It’s unfair to exclude the smallest businesses in the last hours,” said Erik Asgeirsson, a manager of the American Institute of CPAs, asking for more PPP funding. “A lot of false hope has been raised.”
The sudden onset of a new PPP funding debate just after a debate on expanding the application window highlights the challenges facing lawmakers in trying to understand the workings of the program, one of the biggest of all the Covid -19 emergency measures. Congress could not obtain information on how many jobs the program saved, or the extent to which lending reached businesses of people of color and women. And this is not the first time that there is no money left, but to scramble legislators to allocate more.
About $ 960 billion has been allocated to PPP, and the program has given more than $ 746 billion in forgiving loans to 9 million borrowers since April last year. It is one of the most popular Covid-19 emergency relief programs, despite funding challenges, ever-changing rules and fraud. The survey is partly widespread because businesses can have their government debt swept away if they spend the most money on payroll.
The policy of the funding discussion is likely to be tougher than last year, as the U.S. economy shows signs of rapid recovery from Covid-19. Advocates say, however, that there is no reason to end support for small businesses that are still struggling to benefit from the reopening of the country.
“The growth of vaccine jobs indicates that yes, we are seeing light at the end of this very dark tunnel,” said Rebecca Shi, executive director of the U.S. Business Immigration Coalition, which calls for more funding. “But like masks, we should not abandon PPP, especially not for the smallest lenders and rural businesses to repair and rebuild.”
Last month, lawmakers rushed to negotiate and pass legislation to delay the program’s deadline to May 31 from March 31 amid widespread concern that many employers seeking help will be excluded.
The old deadline has become an urgent problem after new SBA fraud investigations delayed the loan application process and threatened to let applicants down.
The original cut-off point of March 31 has also become a problem as Biden has just introduced new rules to ensure that loans reach the smallest, hardest hit businesses that have long struggled to access the program, including self-employed entrepreneurs with criminal records and those with student loan crimes.
The decision to delay the deadline, coupled with the move to increase access, abandoned plans made by Congress last year for how long the remaining EMP funding would remain available.
The SBA only announced the possible lapse of funding late last month, when an official managing the EMP told the Senate Committee on Small Business that the money available for loans would probably run out by the end of April.
Now the money may be depleted before Congress has time to fully consider allocating new funds. Lawmakers left Washington last month and will not return until next week.
The funding issue also creates complications for other changes that legislators intended to make to the program.
One of the major updates lawmakers were considering would allow homeowners to increase existing PPP loans retroactively if they receive them before Biden changed the rules last month.
The change would further increase the demand for PPP money.
Sen Card Small Business Chair Ben Cardin (D-Md.), Who worked with Republicans on legislation to revise the PPP rules, “would also be open to a dual effort to add funds to the program,” said a spokesman.