WASHINGTON–The approaching Paycheck Protection Program expiration date should not leave small businesses or nonprofits stranded, the Independent Community Bankers of America (ICBA) told Congress.
Testifying virtually during a House Small Business Committee hearing, Alice P. Frazier, president of the Bank of Charles Town in West Virginia, called on policymakers to ensure the Small Business Administration clears the thousands of loan applications on hold in the PPP system before the program expires on March 31.
The call is similar to that which has been made by CUNA and NAFCU.
"Under current law, any application not approved by March 31—even if it was submitted prior to that date—cannot receive Paycheck Protection Program funds," Frazier said. "With community banks providing more than 60% of PPP loans and saving an estimated 33.7 million jobs, we believe that any application submitted by March 31 should be eligible for approval and funding. No applicant should be left stranded because of bureaucratic red tape."
Fixes Recommended
Frazier also urged Congress and SBA to make the following fixes to the PPP if lawmakers extend it beyond March 31:
- First-Draw Increase Eligibility: Allow borrowers with forgiven loans to apply for a loan increase.
- Second-Draw Eligibility: Allow those applying for a first draw in 2021 to apply for a second draw.
- Second-Draw Use of Proceeds: Establish a level of spending on ineligible expenses that would not disqualify borrowers from receiving a second loan.
- Farm Partnerships: Provide agricultural partnerships with equitable access to funding.
- Schedule C Borrowers: Allow Schedule C filers to apply for a loan increase under new SBA rules allowing them to use the gross income method.
- Save Our Stages Program: Allow live-action venues eligible for Save Our Stages grants to apply for PPP loans.