The smallest companies can nonetheless apply for the paycheck safety program

A small business owner in Chinatown, San Francisco

Source: CNBC

Time is running out for the smallest businesses to access the priority application deadline for the Small Business Administration’s Paycheck Protection Program.

However, these companies, along with small businesses of any size, can still apply for out-of-priority loans.

The 14-day priority window announced by the Biden Harris administration last month ends today, March 9th, at 5:00 p.m. (CET). During these two weeks, only companies with fewer than 20 employees could apply for loans through PPP, a special period, to assist women and minority companies with access to funds.

More from Invest in You:
Lost jobs, no childcare: a year after the pandemic began, women are not doing well
The IRS received 35 million tax returns in a week as Americans raced to file
Smallest businesses can get additional PPP help. What you should know before applying

Even after this window has been closed, these companies can apply for and receive funding under the program. While they may be competing for cash with larger companies, lenders don’t expect the program to run out of money until the March 31st expiration date.

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

“We could go over $ 200 billion, but I think there will likely be $ 50 billion to $ 75 billion left,” said Sam Sidhu, chief operating officer of Customers Bank, headquartered in Phoenixville, Pennsylvania.

The smallest companies can still apply

This is important for the smallest businesses that wanted to take advantage of the priority application window but delayed submitting documents.

For example, while the special application deadline opened on February 24, eligibility for those struggling with student loan debt, convicted of fraud, or being non-national entrepreneurs did not take effect until the first week of March. cause some confusion. An updated credit calculation formula that meant more money for businesses with an IRS Form 1040 Schedule C wasn’t announced by the SBA until March 3rd.

In addition, the administration was not ready to process forms with the new calculation formula until March 5, so sole proprietorships had little time to access the priority application period.

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

Note the deadline

For many lenders, the March 31st expiration date of the entire program is of concern.

“The upcoming March 31 deadline is a much bigger problem,” said Chris Hurn, managing director of Fountainhead Commercial Capital, a non-bank lender. He added that he fears the date will not be enough for all small businesses to take advantage of the new rules or apply for additional rounds of funding that could be critical to their survival.

Additionally, lenders are under pressure to process all loans as quickly as possible, which was difficult when the rules were changed.

“With this program, the range of everyone was expanded enormously last year,” said Hurn.

So far, the Biden administration has not signaled that the program would be extended, a move that would have to be approved by Congress.

SIGN IN: Money 101 is an 8-week financial freedom learning course delivered to your inbox weekly.

CHECK: Single mom earns $ 10,000 a month in outschool: “I could never have made as much money as a normal teacher” above Grow with acorns + CNBC.

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

You might also like

Comments are closed.