Paycheck Protection Program extension expected, Shaheen says
U.S. Senate expected to vote on new May 31 deadline soon
There’s a good chance the federal Paycheck Protection Program will be extended beyond its current March 31 expiration date, U.S. Sen. Jeanne Shaheen told New Hampshire chamber of commerce officials during a virtual roundtable on Monday.
By a 415-3 vote, the U.S. House Representatives last week passed a bill extending the popular program to May 31. The U.S. Senate has already been looking at the extension and may vote on it as soon as this week, Shaheen said.
The program has so far provided a total of $3.5 billion in forgivable loans to some 35,000 New Hampshire businesses.
The $284 billion program still had more than $100 billion left as of March 21, according to the latest weekly report released by the U.S. Small Business Administration, if you count the latest infusion that’s part of the $1.9 trillion American Rescue Plan that was signed into law March 12 by President Biden. Shaheen and U.S. Sen. Maggie Hassan, who also took part in roundtable, touted the benefits of the new stimulus law.
“We are beginning to see the light at the end of the tunnel,” said Shaheen. The ARP, she said, “provides the tools for business to reopen and stay open.”
The plan also sets aside $28 billion for restaurants and $1.25 billion for such programs as the Shuttered Venues Operated Grant, to help the entertainment industry, which is expected to start taking applications on April 8.
But the law did not give businesses more time to apply for the PPP, and more time is something some of them need, considering the enhanced effort to reach out to smaller and minority-owned businesses to take part.
“If you didn’t have a relationship with a lender some of the smallest businesses fell through the cracks“ in the original PPP, Sheehan said.
Smaller businesses targeted
From the get-go, this year’s PPP roll out tried to target those smaller businesses. For one, it limited the size of businesses allowed to take out a second PPP loan to 300 employees or fewer and lowered the maximum size of the loan from $10 million to $2 million.
The SBA instituted two other changes.
The first restricted the lending to businesses with fewer than 20 employees for two weeks, Feb. 24 to March 9. In the only full week under those restrictions, the average loan size dropped in New Hampshire by about a third to just under $30,000. Only $13 million of loans were approved, compared to $75 million the week before, but the number of loans also dropped, from nearly 800 to 444. The overall average loan size in New Hampshire – which includes all businesses that have received PPP loans in this second round – was $86,655 as of March 21.
The trend was the same nationally, though not quite to the same extent.
The SBA also changed the rules for self-employed individuals.
Previously, the PPP required them to use net profit to calculate their loan eligibility. The new rules allow them to use gross income, which could greatly increase the size of the loan and the amount forgiven.
And according to SBA’s New Hampshire director, Amy Bassett, self-employed individuals can apply the new formula retroactively “so you could work with your lender to get the larger amount.”
As of March 21, more than 11,000 New Hampshire businesses have received $978 million this year through the PPP. Last year, some 25,000 businesses received nearly $2.6 billion. In the week ending March 21, 970 businesses received $52.6 million. That’s slightly more businesses, but less money than the previous week.