Paycheck Protection Program

Government relief programs and lenders’ forbearance have kept U.S. small businesses from defaulting on their debt en masse as revenue slumped during the pandemic crisis, according to a new analysis.

The legislation would extend the Paycheck Protection Program for two months and give the Small Business Administration more time to remedy persistent system glitches that have delayed the processing of thousands of loan applications.

Legislators expressed concerns that thousands of pending applications are stuck in limbo just weeks before the Small Business Administration is legally required to stop accepting them.

Lenders are preparing scores of Paycheck Protection Program applications to secure approval from the Small Business Administration by March 31, but unresolved error codes continue to hinder their efforts.

Nonbanks had worried the end of the Paycheck Protection Program Liquidity Facility would hurt their ability to lend to small businesses. On Monday, the Federal Reserve announced the facility would be extended for three months.

A big funding source for the Paycheck Protection Program is set to expire on March 31. Its demise would pinch nonbanks that are originating and buying loans, especially if Congress continues the PPP beyond this month.

Regulations that merely reflect the beliefs of whoever’s in power undoubtedly get unwound by the next round of leaders. Policies will stand the test of time if they are focused on addressing inequalities in the financial system.

The Small Business Administration is still writing rules for the Paycheck Protection Program two months after its relaunch. Lenders fear they may not have enough time to review those rules before the program’s March 31 expiration date.

It would ignore technical glitches plaguing the entire Paycheck Protection Program and could end up delaying loans to larger borrowers who also need relief, bank executives and their trade groups say.

Only businesses with 20 or fewer employees will be eligible to apply for forgivable loans from the Small Business Administration's Paycheck Protection Program.