5/11/2021
Candace J. Dixon
A stark statement on the Chase for Business website says “We aren’t accepting new PPP applications because SBA PPP funds have run out. If your application is in progress, we’ll email you with an update when we know more.” PNC’s website states “The Small Business Administration (SBA) informed trade associations that Paycheck Protection Program (PPP) funding has been exhausted and the SBA PPP application portal has stopped accepting applications for loans from most lenders, including PNC. PNC learned that the program was shutting down late on May 4, 2021, which is earlier than the program expiration of May 31, 2021. As a result, we are not able to accept new PPP applications or finalize PPP applications that have not been registered by the SBA.” Other lenders have similar statements. If you’re looking for that official statement on the SBA website itself, it isn’t there.
While U.S. Small Business Administration (SBA) Administrator Isabella Casillas Guzman announced positive results regarding the launch of the $28.6 billion Restaurant Revitalization Fund on May 5, the SBA had actually run out of money for the Paycheck Protection Program (PPP) the day before - nearly a month before the application deadline, telling lenders that $6 billion was set aside for applications in review status or in need of additional information due of error codes, with the remaining $8 billion going only to new applications processed by community financial institutions (CFIs), which typically work with businesses in underserved communities.
When Congress extended the PPP application deadline in late March by two months with the PPP Extension Act of 2021, it was in part to give the SBA and lenders time to resolve error codes that were delaying nearly 200,000 applications. Those error codes were related to validation checks instituted by the SBA to prevent fraud.
While the SBA had warned lawmakers in late March that funds would likely run out by mid to late April, the PPP Extension Act of 2021 that pushed the deadline through May 31 didn’t include any additional funding. President Biden remarked at the signing of the act that “Nearly 90,000 business owners are still in line, and there’s money left. Without somebody signing this bill today, there are hundreds of thousands of people who could lose their jobs, and small and family businesses that might close forever. And, as you know, small business is the backbone of our economy, representing almost 50 percent of all the employees in America.”
As of May 9, the PPP had given out 10.8 million loans totaling $780 billion since the program started in April of last year. Still, according to a survey from the Federal Reserve Bank, three out of every 10 small businesses say they likely won't survive 2021 without additional government assistance.