Major business groups, including the U.S. Chamber of Commerce, are pushing Congress to extend the Paycheck Protection Program through the end of the year amid concerns that small businesses need help beyond the measures included in President Biden's $1.9 trillion coronavirus relief package.
The Federal Reserve said Monday it was extending certain PPP-related credit for banks until the end of June, but Congress would have to pass a new law to push the application deadline for the program past the current March 31 deadline.
The outcry for more PPP help underscores the limited attention the forgivable business loans received in the massive spending bill that is speeding toward final approval in the House, setting up Mr. Biden's signing ceremony by week's end.
House leaders expect a vote no later than Wednesday.
Eric Groves, the CEO of Alignable, a Boston-based online small business referral network, said if the Biden administration is going to keep shifting the time frame for when vaccines should be available to all Americans, it also should provide flexibility for small businesses.
"The relief funds are really just a bridge. They started out as an eight-week bridge for a 12-month problem, and that's why we have to keep coming back for additional relief," Mr. Groves said.
He praised Mr. Biden for announcing some recent changes to PPP, which facilitates forgivable loans for cash-strapped small businesses. Those changes included a two-week period, concluding Tuesday, during which only businesses with fewer than 20 employees can apply for the funds.
But it will take more time to see if the changes worked.
"Let's figure out the formula," Mr. Groves said. "Let's put in place the process to do this primarily through local and regional banks and online providers."
The Chamber of Commerce, the National Retail Federation, the U.S. Travel Association and other business groups say the administration needs to allow more time to see if recent changes to the program succeeded in getting funds to businesses that need them the most.
"Extending the PPP deadline through the end of this year will ensure that the segment of small businesses facing the greatest obstacles do not get left behind," the groups said in the letter this month to Senate leaders.
The Federal Reserve Board said Monday that it would extend by three months, to June 30, a credit facility to support financial institutions that are making PPP loans. The facility accepts the loans themselves as collateral and helps banks and financial institutions fund additional loans.
While banks might have some added wiggle room with the program, small businesses are still staring at a March 31 deadline to apply.
Congress initially set up the program as part of the $2.2 trillion coronavirus relief package lawmakers passed and former President Donald Trump signed into law last March. It doled out low-interest loans for businesses that are later forgiven if the companies use 60% of the money to make payroll.
Bharat Ramamurti, deputy director of the National Economic Council, said last month that the administration was open to an extension but that Mr. Biden couldn't do it unilaterally.
A spokesman for Sen. Ben Cardin, Maryland Democrat and chairman of the Senate Small Business Committee, said the senator supports an extension and that he would be open to pushing back the March 31 deadline if it's clear small businesses still need the program.
The president's $1.9 trillion relief package includes an additional $7 billion for the program and expands eligibility for some nonprofit groups.
"Newly eligible nonprofits will need time to apply for these funds, so an extension of the program beyond March 31 is essential," a coalition of nonprofit groups, including the National Council of Nonprofits, said in a statement.
The House isn't expected to tinker with the Senate version of the bill in order to rush it to Mr. Biden's desk.
The Senate imposed some additional guardrails on who is eligible for the direct checks of up to $1,400 per person. The senators also cut a $400-per-week boost to unemployment to $300 per week, which was a setback for liberal Democrats.
Still, House liberals signaled they're prepared to support the Senate bill. Like the House plan, it includes $350 billion for states and localities and about $170 billion for K-12 schools and colleges, among other items.
"I think everybody understands this is a big progressive win," said Rep. Pramila Jayapal, the Washington Democrat who is chairwoman of the Congressional Progressive Caucus.
As of Sunday, about $165 billion of the additional $284 billion Congress authorized for PPP in December was spoken for, according to the Small Business Administration.
The program has facilitated more than 7.5 million loans totaling more than $687 billion, according to the Small Business Administration.
Congress imposed new limits on which businesses are eligible for the funds in the latest round after major chains such as Shake Shack and Ruth's Chris received the loans.
Those companies and other big corporations were eventually shamed into giving the money back or saying they wouldn't accept the funds.