Some PPP Applicants Once Again Face Processing Delays

By:
Chris Gaetano
Published Date:
Mar 5, 2021
GettyImages-1220927314-PPP

Despite, or perhaps because of, recent revisions in Paycheck Protection Progam (PPP) eligibility rules to give priority to the smallest businesses, some applicants are still facing significant processing delays that could serve to undermine the purpose behind the change, according to CNN.

Last month, the Biden administration announced that, for two weeks, from Feb. 24 through March 9, only businesses with fewer than 20 employees may apply for Paycheck Protection Program (PPP) loans. This change was meant to address a major critique of the last program, namely that much of the money meant for small businesses wound up going to large corporations, which claimed the funds through a variety of methods such as counting individual franchises as separate borrowing entities.

But CNN reported that some owners of these smallest businesses face a bitter irony, as the announcement itself seems to have delayed their applications. The priority window opened on Feb. 24, but guidance on the changes only dropped this week. Many banks, despite the revisions, wound up putting many applications on hold while waiting for this guidance, and now that it's out, many are asking that potential borrowers redo their applications to fit within the new requirements.

This, combined with processing delays at the Small Business Administration itself due to increased need for compliance checks, has slowed the process down to the point where these small business owners may not only miss the March 9 window, but also the March 31 deadline for when the program closes entirely for everyone. Consequently, a coalition of dozens of business associations, including numerous state chambers of commerce, recently sent a letter to Congress asking that the application deadline be extended to the end of the year. It noted that implementing the program properly requires many steps.

"All these steps, including President Biden’s two-week initiative focusing PPP aid towards businesses with fewer than 20 employees, need additional time for them to actually produce the desired result," said the letter. " Extending the PPP deadline through the end of this year will ensure that the segment of small businesses facing the greatest obstacles do not get left behind,"

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