WASHINGTON – Arizona business officials welcomed Tuesday’s extension of the Paycheck Protection Program, a multibillion-dollar pandemic-relief program for businesses that one official said has been “keeping people open from day to day” over the past year.
The program was set to expire Wednesday with $88 billion still unallocated, but President Joe Biden signed a measure Tuesday extending it for another 60 days. Now businesses have until May 31 to apply for loans, which have been worth billions to Arizona businesses so far.
In remarks Tuesday, Biden said almost 90,000 small businesses are still waiting to be approved for a PPP loan. Without the extension, he said, “there are hundreds of thousands of people who could lose their jobs and small and family businesses that might close forever.”
Under the program, businesses work with their lenders to get loans that are guaranteed by the federal government. The loans can ultimately be forgiven if the money is used to keep workers on payroll through the pandemic downturn and for other specific business-related expenses.
Since it was created last year as part of the COVID-19 relief CARES Act, the program has made $734.1 billion in loans to 8.7 million businesses across the country, according to the most recent data from the Small Business Administration.
Arizona businesses have filed 131,000 applications under the program, which has loaned about $11.6 billion in the state, according to Shivani Dubey, Arizona SBA Deputy District Director.
“We’ve heard from various small businesses all over the state as far as some have been able to keep their payroll because of the PPP,” Dubey said. “Some have been able to just sustain their business model, and you know, these are people’s life dreams they’ve worked their whole lives establishing their small business.”
Despite some gripes about the early roll-out of the program, Arizona business officials said the program is now working out – and welcome.
“This comprehensive approach to make sure that businesses are invested in as we recover from the pandemic is really important,” said Thomas Barr, vice president of business development at Local First Arizona.
“Consumer confidence is on the rise and more and more people are feeling comfortable visiting business but we need to be really vigilant to ensure that we emerge out of the pandemic stronger than before,” Barr said.
One critical element of the extension is that applications that meet the May 31 filing deadline will be considered for an additional 30 days. That additional grace period will make a big difference, said Chad Heinrich, Arizona director for the National Federation of Independent Business.
“I think that is going to be helpful so that some small businesses are not seemingly unfairly harmed by any processing delays,” Heinrich said.
But Heinrich said small businesses still face a tough road ahead.
“NFIB member research of small business owners indicates that economic conditions are very challenging still for our small businesses,” he said. “The small business optimism index remains below a historic 47-years average. That’s not a good sign.”
Dubey said the extension, and the additional grace period, will be “appreciated by lenders and by borrowers and by the SBA, frankly.”
“It is a process from end to end … so we look forward to the extra time being really able to help our small businesses that are in need,” she said.
“It’s one of those things where we really truly see the benefit of what’s happening with these programs from the smallest retail shop to a larger established small business,” Dubey said.
Barr said the extension comes at a critical time.
“I was just speaking to a business yesterday who thought that she was still on a deadline to get in a PPP application by March 31st and I was able to tell her hey there’s great news, this deadline is going to be extended,” he said.