Following approval by the U.S. Senate Thursday, a bill extending the deadline to apply for Paycheck Protection Program funding now goes to President Biden. If he signs the bill, as expected, it will extend the March 31 deadline to June 30 for businesses interested in a loan.
The process for effectively turning a PPP loan into a grant has been simplified since PPP’s first round, and in other ways the program is less restrictive than in PPP’s first round. Many small-fleet clients who’ve received assistance through financial services provider ATBS have received loans in the neighborhood of $10,000. Most borrowers work through banks to get the loans under the program administered by the U.S. Small Business Administration.
The PPP Extension Act of 2021 was approved by overwhelming margins in the House and Senate. It “will provide an opportunity for the SBA to address its technical issues, provide critical guidance, and work with lenders and borrowers so that small businesses can navigate the application process and receive a loan,” said Lisa Simpson of the American Institute of CPAs in recent testimony to the House Committee on Small Business.
The SBA said recently that "two million PPP applications have been held up by error codes and approximately 190,000 applications remain unapproved. This reinforces the great need for extending the loan application deadline.”
In assisting its owner-operator clients with PPP applications, ATBS has not noticed delays in the process, said ATBS President Todd Amen. “We have heard of banks that stopped accepting applications over the past few weeks in anticipation of the deadline being the end of this month,” he said.
The PPP last month was made more accessible to the smallest businesses when a 14-day loan application period was set for businesses with fewer than 20 employees.
One potential drawback of PPP2 is a hurdle for businesses looking to get a second PPP loan. PPP2 is requiring such borrowers to have suffered a drop of at least 25% in revenue for any quarter in 2020 compared to the same quarter in 2019. While most of trucking rebounded well in the second half of 2020, many small trucking operations took a severe enough hit during the spring to qualify for that 25% decline.
Those interested in applying should contact their bank. SBA has other information on the application process.