As the March 31 deadline to apply for a Paycheck Protection Program loan approaches, federal lawmakers are acting in bipartisan fashion to give small businesses more time to submit applications.
With more than $110 billion in funding still available, the U.S. House voted overwhelmingly March 16 to extend the deadline to May 31.
The U.S. Senate is expected to take up the bill, which also gives the U.S. Small Business Administration and private sectors the SBA until June 30 to process applications.
The SBA has approved 27,295 PPP loan applications from Connecticut businesses totaling more than $2.2 billion through early March.
But with just two weeks to apply for a loan and many applications still pending, lawmakers are concerned the program will not reach as many small businesses as it could.
The first round of PPP loans were part of the Coronavirus Aid, Relief, and Economic Security Act Congress approved in March last year to assist small businesses devastated by the pandemic.
The first round helped over 63,000 Connecticut businesses access over $6.7 billion in loans.
The second relief bill Congress approved in December set aside another $284 billion to help small businesses hurt by the pandemic.
The $1.9 trillion American Rescue Plan Act, signed into law March 11, provides another $7 billion to the PPP to expand its eligibility and includes other forms of economic assistance and small business aid.
Businesses with 500 or fewer workers were eligible for the first road of PPP loans.
The second round is for businesses that, in general, have 300 or fewer employees and had at least a 25% reduction in gross receipts due to the pandemic.
Companies that received a PPP loan in the first round are eligible for a second round loan.
Although the loans are low interest, they are forgiven if at least 60% of the funds are used for payroll costs.
The remaining 40% can be spent on mortgage interest or rent, utilities, operational costs such as business software, uninsured property damage from civil unrest, supplier costs and essential goods, and personal protective equipment for employees.
Small businesses may apply for a PPP loan through banks and other lenders that certify the loans, which the SBA underwrites.