What’s in the $1.9 trillion rescue plan for small businesses
The additional money is intended to expand eligibility for the loans to include more nonprofit organizations than were eligible before, as well as digital news services providing local news and public health guidance during the pandemic.
Despite the added funds, however, the legislation doesn’t actually extend the program, which is currently set to expire on March 31.
That’s an issue because there is already a backlog of applications still pending approval by the Small Business Administration. And, under current rules, any loan that hasn’t been approved by March 31 will not be funded.
That means banks must decide how much longer they want to accept new applications, since it now takes 24 to 48 hours for a bank to hear back from the SBA on whether a submitted loan application has been approved.
In cases where applications haven’t been approved, the SBA may request more information, or flag a business owner as ineligible. Clearing up those issues can take days or weeks longer.
Bank of America, for instance, stopped accepting new applications on Tuesday. “As the largest lender in the program since it began, we have 30,000 applications in process and want to allow enough time to complete the work and get each client’s application through the SBA process by March 31,” a bank spokesman said in an email to CNN Business.
Banking associations, the American Institute of CPAs and others have been calling on Congress to extend the program beyond March 31, or to at least allow the SBA to continue processing loan approvals for applications submitted before March 31.
As of March 7, the SBA has made 7.6 million PPP loans totaling $678.4 billion since Congress created the program last spring, according to data from the federal agency.
More money for restaurants, venue operators and minority-owned businesses
Other provisions in the American Rescue Plan intended to help small businesses include:
Special relief for restaurants: The American Rescue Plan includes nearly $29 billion to create a grant program that provides direct relief to restaurants.
Additional funding for the Small Business Administration: To help the SBA administer all the new programs that have fallen under its purview as a result of the pandemic, the bill allocates another $1.325 billion to its budget.
