Last week, President Joe Biden extended the application deadline for the Paycheck Protection Program (PPP) the day before it was set to expire. The extension gives small businesses hit hard by the pandemic until May 31 to apply for forgivable assistance.
The PPP is a federal emergency loan initiative set up by the Small Business Administration as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act aimed at helping businesses retain their employees. Borrowers can have their loans forgiven if they prove they spent the money on payroll and other eligible expenses.
When the PPP was launched in April of last year, the entire pool — $349 billion in direct aid — was drained within two weeks. President Donald Trump then signed a second round of $310 billion into circulation in August. And in January of 2021, another $284 billion were made available to businesses, with special emphasis on helping very small businesses, including the self-employed, and those that did not have ready access in earlier rounds of the program.
Of the $284 billion in the third package of PPP funding, about $66 billion is still available. Some national small business advocates are warning that there may not be enough funding left in the PPP pool to give assistance to all the borrowers who could apply between now and May 31. Politico reported on Tuesday that organizations like the American Institute of CPAs are calling on Congress to spend even more money on relief for small businesses, though it remains to be seen if Congress will respond.
In the past year, at least 79 Rappahannock businesses have received no less than $4.7 million in federal assistance from the Paycheck Protection Program. But this time around, local businesses have been slower to apply for loans than they were in the previous two iterations of the program.
Jason Brady, senior vice president at Oak View National Bank in Washington, told the Rappahannock News in March that the stagnation might be caused by some businesses falling short of the eligibility threshold for a ‘second draw.’ Others, he said, might have recovered from the economic impacts with one loan and therefore simply don’t need the aid.
Nevertheless, Brady said he continues to see demand for the program in the community his bank serves. “Oak View continues to take applications for first and second draw PPP customers until the newly established deadline of May 31st,” Brady wrote in an email. “The Small Business Administration has continued to tweak the program, which has been to the benefit of our area’s smallest business owners and those who are self employed.”
John Asbury, CEO of Atlantic Union Bank, confirmed that his organization will also continue to help businesses file applications for PPP loans.
“While we are seeing the light at the end of the tunnel as vaccines become more widely available, we need to remain vigilant and continue to be economic first responders for small businesses throughout the state,” Asbury said. “Many small businesses are still in desperate need of this financial support, and I strongly encourage businesses to take this opportunity.”