AMARILLO, Texas (KFDA) - By a nearly unanimous vote, the House of Representatives passed a bill extending the deadline to apply for a PPP loan to May 31, as the current March 31 deadline quickly approaches.
“As of last week, there was still over a 30 percent of the allocated funds available over this round of PPP,” said Mikel Williamson, president and CEO of Happy State Bank.
Small business advocates have been calling for the extension to give lenders more time to implement a series of changes the current administration made to the program.
“One of the things about the deadline of March 31 was that it needed to be processed by that point. The May 31 deadline, it just needs to be filed by that time,” said Shane R. Groff, business consultant at America’s SBDC at WTAMU.
Under the bill, the SBA faces a deadline of June 30 to process applications.
After initially being criticized for allowing bigger banks and bigger companies to grab most of the initial funds, the program has continuously adapted rules and guidelines to make funds more available to the smallest businesses.
However, these improvements have led to slowdowns.
“There’s been a variety of issues, whether is from one number being inter-grown to a change of ownership from a business from the first round to the second round,” said Max Pierce, assistant vice president, Amarillo National Bank. “All of those delays take a lot of time and back and forth with the SBA.”
One significant change that has some business owners, who already filed for PPP loans unhappy is the implementation of a revised formula to calculate maximum loan size for sole proprietors, independent contractors and self-employed individuals.
The new calculation for schedule C filers, will be based on gross income instead of net profit.
“Unfortunately, the SBA has decided that the formula is not retroactive so the new formula is only available for new applicants,” said Williamson.
The legislation is now awaiting action in the Senate.
Others who will soon receive economic relief are nonprofits and venue acts.
The SBA will start accepting applications for the Shuttered Venue Operators Grant on April 8.