Small businesses got some good news on Tuesday, when the House of Representatives voted to extend the Paycheck Protection Program for two months.
The bill, the PPP Extension Act of 2021, passed the House on a 415-3 vote. It would extend the program to May 31, instead of the current date of March 31, and give the Small Business Administration an additional 30 days to process loans.
Next, the bill goes to the Senate, where it is expected to be approved. Majority Leader Charles Schumer, D-N.Y., said that Democrats want to pass the measure as quickly as possible.
Last week, a companion to the House bill was introduced in the Senate by a bipartisan group including U.S. Senate Committee on Small Business & Entrepreneurship Chair Ben Cardin, D-Md.; Sen. Susan Collins, R-Maine; and Sen. Jeanne Shaheen, D-N.H.
More from Invest in You:
Brain fog, fatigue and chronic stress. 53% of U.S. women are burned out
Women lag behind men in saving for retirement. Covid made it worse
5 strategies to help you get back into the workforce after a career break
“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,” said Sen. Cardin in a Thursday statement. “This common sense, bipartisan bill will meet the continued demand for PPP loans by giving small businesses two more months to apply and giving SBA an additional month to process the loan applications by June 30.”
Calls to move the PPP deadline have grown since the Biden administration in February announced changes to the program, including a 14-day priority application period for businesses with fewer than 20 employees, an updated loan calculation formula for sole proprietors and new eligibility rules.
The goal of the exclusive application window and new rules was to get more forgivable funding to the smallest businesses, which are majority women- and minority-owned.
Still, the timing of the changes brought confusion and frustration for many, especially sole proprietors who missed out on bigger loans by a few days. The SBA wasn’t ready to accept new applications from these businesses until March 5, giving them only a few weeks to take advantage of the change ahead of the March 31 deadline.
The push to extend PPP also comes after the passage of the $ 1.9 trillion American Rescue Plan, which President Biden signed into law March 11. The bill includes $ 7 billion to expand PPP along with other provisions aiding small businesses.
This year through March 14, the SBA had approved more than 2.7 million loans worth about $ 181 billion. When the program reopened in January, it had $ 284 billion in funding.
“Extending the Paycheck Protection Program is critical at a time when we know many small business owners are still applying for funds, or already applied and are still waiting for their application to be approved or are hoping to receive desperately needed funds soon,” said John Arensmeyer, founder and CEO of Small Business Majority.
SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox.
CHECK OUT: Single mom earns $ 10,000/month on Outschool: ‘I would have never been able to make as much money as a regular teacher’ via Grow with Acorns+CNBC.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.