Brief:

• Lawmakers in the House and Senate have come together in a bipartisan effort to extend the Paycheck Protection Program’s deadline by two months to May 31.
• The proposal to extend the small-business relief program, which ends March 31, was introduced Thursday by House Small Business Chair Nydia Velázquez, D-NY, and Rep. Blaine Luetkemeyer, R-MO. Senate Small Business Chair Ben Cardin, D-MD, and fellow committee members Sens. Susan Collins, R-ME, and Jeanne Shaheen, D-NH, unveiled companion legislation Thursday that mirrors the House bill.
• The House is expected to vote on the bill next week before members leave Washington, D.C., until mid-April, according to Politico.

Insight:

“The demand for PPP loans right now is a testament to the program’s effectiveness and the lingering impacts of this pandemic. That’s why we cannot cut off aid now and this short-term extension is so important,” Velázquez said in a statement. “The bill will go a long way in helping small businesses provide for their employees and keep our economic recovery moving.”

Under the PPP Extension Act, small businesses will have two additional months to submit an application for a PPP loan, and the Small Business Administration (SBA) will have until June 30 to close pending applications.

Bank trade groups have been lobbying for an extension to the program, which the Biden administration revised Feb. 22 to allow sole proprietors, independent contractors and the self-employed to use gross income rather than net profit to calculate the amount of PPP funding they should receive.

The SBA updated its systems to implement that change March 5, The New York Times reported, meaning changes the White House outlined last month and codified March 3 have only been taken into account on applications processed over the past week.

Calls to extend PPP come as several of the country’s largest lenders have announced they’re shutting their application acceptance window early to meet the March 31 deadline.

Bank of America said in a statement on its website that it stopped taking new applications Tuesday for first- and second-draw PPP loans from clients.

JPMorgan Chase set a March 19 deadline for borrowers to apply for PPP loans, and Citi said it would not accept PPP loan applications after March 20.

Efforts to extend the program’s deadline were expected, given the Biden administration’s implementation of a two-week pause from Feb. 24 to March 9, where only businesses with fewer than 20 employees were permitted to submit applications.

That pause could decrease the number of loans issued under the program — and the funding levels — by shortening the time period the rest of the eligible market has to apply before the March 31 deadline, Michael Brauneis, managing director and U.S. financial services industry leader at global consulting firm Protiviti, told Banking Dive last month.

Since the start of the program, the SBA has approved 7.6 million PPP loans totaling $687.3 billion as of Sunday.

The $1.9 trillion stimulus plan President Biden signed Thursday includes $7.25 billion in additional PPP funding.

This article was originally written by Anna Hrushka and appeared here.