PPP Extension Act of 2021

Floor Speech

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Ms. COLLINS. Mr. President, I rise to urge my colleagues to support passage of H.R. 1799, the PPP Extension Act of 2021. It is imperative that we act immediately to pass this bill because we are just days away from the PPP being closed to applications for assistance. This bill mirrors legislation I introduced with my colleagues, Senators Cardin and Shaheen, which is cosponsored by Senators Marshall, Sullivan, Rosen, Murkowski, Leahy, Wyden, Tillis, Ossoff, Capito, Merkley, Heinrich, Portman, Klobuchar, and Manchin.

Last March, Senators Rubio, Cardin, Shaheen, and I crafted the Paycheck Protection Program, PPP--a forgivable loan program designed to help keep small employers afloat and their employees paid during the pandemic.

The bipartisan bill we are considering today would simply extend the current application deadline for new PPP loans from March 31 to May 31 of this year and then provide an additional 30-day period during which time the Small Business Administration may continue processing applications received prior to the new May 31 deadline. This bipartisan bill passed the House last week by an overwhelming margin of 415 to 3.

The PPP has been a lifeline for small businesses in Maine and across the country, providing the support they need to survive the pandemic and continue paying their employees. In 2020, more than 5 million small employers received forgivable PPP loans, helping to sustain upwards of 50 million American jobs. This included more than 28,000 Maine small businesses, which received nearly $2.3 billion in forgivable PPP loans. The average loan size in Maine during this time was $80,000.

Recognizing the importance of this program for our Nation's small employers, the bipartisan December 2020 COVID-relief law provided an additional $284.5 billion to reopen the Paycheck Protection Program and allow the hardest hit small employers to receive a second forgivable loan. The December law also made other improvements to the PPP, such as expanding forgivable overhead expenses to include supplier costs and investments in facility modifications and personal protective equipment needed to operate safely.

Since reopening in January, more than 3.1 million additional forgivable loans--totaling nearly $196 billion--have been approved for small businesses across the country. In Maine, more than 12,700 small employers have been approved for $797 million in forgivable loans since PPP's reopening. In total, Maine small employers have been approved for upwards of $3 billion in forgivable loans since the program was created last year.

I have heard from numerous small employers about the impact this program has had on them and their employees. The PPP has helped the owners of Pottle Transportation in Hermon, Anglers Restaurants in Hampden, and the Harraseeket Inn in Freeport keep their businesses alive and their employees paid. Hodgdon, America's oldest boat builder, was able to keep its family-owned East Boothbay business in operation with the help of two forgivable PPP loans. The owner of Channel X Radio in Aroostook County told me that two forgivable PPP loans kept his business going. The Boys & Girls Clubs of Southern Maine and the Y in Bangor have been able to provide childcare and other services to children due to support from the PPP.

With the ongoing distribution of COVID-19 vaccines and reopening of our Nation's economy, I am hopeful that better times will soon be ahead. We are not there yet, which is why we need to extend the deadline to apply for new PPP loans. Extending the deadline would provide more time for the Small Business Administration to resolve error messages generated by its computer systems that prevented eligible small businesses from receiving approval for a PPP Loan. It would also give us more time to address an inequity facing certain sole proprietors who received their PPP loans before the Biden administration unexpectedly announced a change in the maximum loan amount calculation for these types of businesses.

By extending the PPP for another 2 months and then providing an additional 30 days after that time for the SBA to process applications that are still pending, the bill before us today would help our Nation's small employers retain access to forgivable PPP loans.

This bill has been endorsed by more than 90 organizations, including the National Federation of Independent Business, U.S. Chamber of Commerce, American Hotel & Lodging Association, International Franchise Association, National Restaurant Association, the U.S. Travel Association, and the Independent Community Bankers of America. I would ask unanimous consent that these letters of support be printed in the Record at the conclusion of my statement.

I would like to once again thank my colleagues, Senators Cardin and Shaheen, for partnering with me on this legislation, and Senator Rubio for working to craft the PPP and oversee its implementation. I look forward to working with them and the new administrator of the Small Business Administration to ensure that the PPP is implemented according to Congressional intent.

I urge my colleagues to support passage of this bill.

Hon. Susan Collins, U.S. Senate, Washington, DC. Hon. Ben Cardin, Chairman, U.S. Senate Committee on Small Business, Washington, DC. Hon. Jeanne Shaheen, U.S. Senate, Washington, DC.

Dear Senator Collins, Chairman Cardin, and Senator Shaheen: On behalf of the Consumer Bankers Association (CBA), I write to express our support of S. 723, The PPP Extension Act of 2021. I thank you for your continued leadership as our nation rises to meet the challenges posed by the COVID-19 crisis. CBA commends the work of Congress, the Small Business Administration (SBA), and all the lenders across the country who together worked dutifully to make the Paycheck Protection Program (PPP) a reality and provide much needed relief to millions of small businesses.

Lenders remain committed to serve their small business customers and have engaged considerable resources to process PPP loan applications so they can ensure our nation's small businesses have the support they need to endure these challenging economic times. Unfortunately, operational changes made by SBA during this current round of PPP lending has slowed the funding of PPP loan applications.

With just weeks before the program sunsets, our members are working tirelessly to resolve complications with the processing and approval of PPP applications. Issues flagged during SBA's processing of applications, such as loan hold and error codes, continue to be major hurdles for successful PPP funding. Despite lenders' efforts to work with their customers and the SBA to quickly resolve them, these issues continue to significantly delay the funding of requests to businesses that have very pressing financial concerns. This, coupled with the recent changes by the SBA allowing Schedule C borrowers to qualify for more PPP relief, makes it imperative that more time is provided.

Extending the PPP and providing a window for lenders and the SBA to process received applications will ensure any small business that wants access to the program is able to do so. The PPP Extension Act of 2021 will provide the SBA, lenders, and small businesses the critical time that is needed to properly implement recent alterations to the program and resolve any outstanding processing issues, ultimately allowing small businesses to fully realize the benefits of the PPP.

Again, thank you for your time and consideration on these important matters. CBA and our members remain eager to work with Congress and the SBA to help small businesses in these uncertain economic times. Sincerely, Richard Hunt, President and CEO, Consumer Bankers Association. ____ March 15, 2021. Hon. Ben Cardin, Chair, Senate Small Business Committee, Washington, DC. Hon. Susan Collins, U.S. Senate, Washington, DC. Hon. Jeanne Shaheen, U.S. Senate, Washington, DC. Hon. Carolyn Bourdeaux, House of Representatives, Washington, DC. Hon. Nydia Velazquez, Chair, House Small Business Committee, Washington, DC. Hon. Blaine Luetkemeyer, Ranking Member, House Small Business Committee, Washington, DC. Hon. Young Kim, House of Representatives, Washington, DC.

Dear Senators Cardin, Collins and Shaheen and Representatives Velazquez, Luetkemeyer, Bourdeaux and Kim: The undersigned organizations are writing to thank you for your bicameral leadership and swift bipartisan action to provide relief to America's small businesses through this economic emergency. We strongly support the PPP Extension Act of 2021, which will extend the Small Business Administration's (SBA) Paycheck Protection Program (PPP) application period beyond the March 31, 2021 sunset date.

While we realize the Small Business Administration (SBA) is under tremendous time constraints and is struggling with internal resource issues, our members are highly concerned by the lack of progress on major Paycheck Protection Program (PPP) processing issues, including hold/error codes and application rejections due to Taxpayer Identification Number (``TIN'') issues or mismatches, in addition to many unresolved technical problems with the current PPP process. These delays and denials may put many applicants in danger of not making the March 31st authorization deadline.

Nearly one year into the COVID-19 pandemic, the continued liquidity challenges of the small business sector are acute, especially for those business limited by dramatic capacity restrictions and other critical health and safety protocols in place to protect the public, consumers and workers from COVID-19. Thank you for extending the window of opportunity for pandemic programs to effectively impact the affected small business sector, especially those traditionally under- invested and underserved groups which must also be given the chance to succeed.

We stand ready to work with you during this critical moment, and thank you for considering our views. Sincerely,

Accessories Council (AC); AICC, The Independent Packaging Association; American Apparel & Footwear Association (AAFA); American Bankers Association; American Beverage Licensees; American Council of Engineering Companies; American Dental Association; American Farm Bureau Federation; American Hotel & Lodging Association; American Lighting Association; American Mold Builders Association; American Rental Association; American Society of Travel Advisors; American Subcontractors Association; American Supply Association; AMT--The Association For Manufacturing Technology; Asian American Hotel Owners Association; Associated Builders and Contractors; Associated General Contractors of America; Association of the Wall and Ceiling Industry; Auto Care Association.

Bank Policy Institute; Brea Chamber of Commerce; Building Owners and Managers Association (BOMA) International; Chemical Fabrics & Film Association (CFFA); Coalition of Franchisee Associations; Consumer Bankers Association; Council of Fashion Designers of America (CFDA); Economic Innovation Group; Electronics Representatives Association; Energy Marketers of America; Foodservice Consultants Society International--The Americas; Foodservice Equipment Distributors Association; Franchise Business Services; Global Business Travel Association; Global Cold Chain Alliance; Golf Course Superintendents Association of America; Independent Electrical Contractors; International Council of Shopping Centers; International Franchise Association; ISSA--The Worldwide Cleaning Industry Association.

Korean American Chamber of Commerce of Orange County; La Habra Chamber of Commerce; National Association of Development Companies (NADCO); National Association of Government Guaranteed Lenders (NAGGL); National Association of Home Builders; National Association of Professional Insurance Agents; National Association of the Remodeling Industry; National Association of Theatre Owners; National Association of Trailer Manufacturers; National Association of Women Business Owners (NAWBO); National Automatic Merchandising Association (NAMA); National Community Pharmacists Association; National Cotton Council; National Council of Chain Restaurants; National Electrical Contractors Association; National Electrical Manufacturers Representatives Association (NEMRA); National Federation of Independent Business (NFIB); National Fisheries Institute; National Franchisee Association.

National Independent Venue Association; National Ready Mixed Concrete Association; National Restaurant Association; National Retail Federation; National Roofing Contractors Association; National RV Dealers Association (RVDA); National Small Business Association; National Tooling and Machining Association; North American Association of Food Equipment Manufacturers (NAFEM); North American Die Casting Association; Orange County Business Council; Pet Industry Distributors Association; Precision Machined Products Association; Precision Metalforming Association; Promotional Products Association International (PPAI); San Gabriel Valley Economic Partnership; Secondary Materials and Recycled Textiles Association; Service Station Dealers of America and Allied Trades (SSDA-AT).

Small Business Council of America; Small Business & Entrepreneurship Council; Small Business Legislative Council; Small Business Majority; Specialty Equipment Market Association; Specialty Tools & Fasteners Distributors Association (STAFDA); SPRI; Tile Roofing Industry Alliance; Tire Industry Association (TIA); The Real Estate Roundtable; Travel Goods Association (TGA); United States Hispanic Chamber of Commerce; United Veterinary Services Association; U.S. Chamber of Commerce; U.S. Travel Association; Yorba Linda Chamber of Commerce. ____ Independent Community Bankers of America, Washington, DC, March 16, 2021. Hon. Ben Cardin, Chairman, Committee on Small Business & Entrepreneurship, U.S. Senate, Washington, DC. Hon. Susan Collins, U.S. Senate, Washington, DC. Hon. Jeanne Shaheen, U.S. Senate, Washington, DC.

Dear Chairman Cardin and Senators Collins and Shaheen: On behalf of community banks across the country, with more than 50,000 locations, I write to thank you for introducing the PPP Extension Act of 2021 (S. 723). This legislation is needed to ensure that thousands of Paycheck Protection Program applicants--small businesses, churches, and other non-profit employers--are not stranded by an abrupt shutdown of the Program and would do so using funds that have already been appropriated.

Community banks are doing everything in their power to complete and submit PPP applications to the SBA before the March 31 deadline. Unfortunately, they have no assurances that qualified applications submitted timely will be approved. The CARES Act does not allow for approval of applications after March 31, regardless of when they were submitted and the quality of the applications. Unless a statutory change is made, thousands of applications will be rejected simply because the clock has run out.

This outcome would be especially unfair because of the thousands of applications have been in limbo at the SBA for weeks because they were flagged and put on hold by an automated program for possible waste, fraud, or abuse. These applications require SBA review in order to be cleared of holds and approved for funding. If they cannot be cleared by March 31, cash starved applicants and the people they employ will be denied access to funds they had anticipated and planned for. We do not believe this outcome was intended by Congress.

The PPP Extension Act would resolve this problem by extending the application deadline until May 31 and creating a second deadline of June 30 for SBA approval. This will give applicants more time, and the two-tiered deadline will ensure the Program does not end abruptly. additional changes needed to ensure equitable distribution of ppp funds

Any extension of the deadline will give Congress the opportunity to refine and improve the Program rules and formulas to ensure equitable distribution of funds to those borrowers that can make the best use of them. ICBA urges Congress and the SBA to make fixes to resolve the problems identified below.

First Draw Increase Eligibility. Certain borrowers who have not yet filed for and received forgiveness of their first draw 2020 PPP loan may apply for an increase in that loan. However, borrowers whose first draw 2020 loans have already been forgiven cannot apply for a first draw loan increase, even if they otherwise meet the criteria for an increase. This is unfair because it punishes borrowers who filed forgiveness applications early. The statute should be amended to allow borrowers who have received first draw loan forgiveness to be eligible to receive a first draw loan increase.

Second Draw Eligibility. Those applying for a first draw in 2021 should be allowed access to a second draw. Community bankers have solicited and received numerous applications for first draw loans in 2021. In many cases, these applicants would have applied for first draw loans in 2020, if they had the benefit of better information and advice, and would now be eligible for second draw loans. They have effectively left money on the table that could be used for critical expenditures.

Second Draw Use of Proceeds Requirement. Borrowers with a modest shortfall in using first draw dollars for eligible purposes shouldn't be shut out from second draw loans, especially if they've already repaid the remaining balance on the first draw loan. Congress should consider creating a percentage-based de minimis test to define a level of spending on ineligible expenses that would not disqualify a borrower for a second draw loan.

Farm Partnerships. Current law allows self-employed farmers and ranchers that report farm income on Schedule F to use the gross income method, rather than the net income method, to calculate their maximum loan amount and owner's compensation. However, SBA has limited this treatment to 1040 Schedule F filers. It is not available to thousands of self-employed farmers and ranchers whose businesses are organized as partnerships or S corporations. Congress should direct the SBA to make the gross income method available to these farmers and ranchers.

Schedule C Borrowers. Schedule C filers should be able to apply for an increase under new SBA rules that allow Schedule C borrowers with no employees to use gross income rather than net profit to determine the loan amount. This is a welcome change, but those borrowers who have already obtained loans have no opportunity to apply for an increase based on the new rules. They may qualify for significantly larger loans but are effectively being punished for submitting their applications early.

Save Our Stages Applicants. Live action venues eligible for Save Our Stages grants should be allowed to apply for PPP loans while waiting to find out if they will receive a grant. If such a venue eventually does receive a grant, the amount of the grant could be reduced by the amount of the PPP loan, thereby avoiding the double dipping prohibited by the statute.

Thank you again for introducing the PPP Extension Act. We look forward to working with you to advance this important legislation. We urge you to use this opportunity to address the problems with the Program discussed above. Sincerely, Rebeca Romero Rainey, President & CEO. ____ NFIB, March 25, 2021.

Dear Senator: On behalf of NFIB, the nation's leading small business advocacy organization, I write in support of H.R. 1799, the PPP Extension Act of 2021, which will extend authorization for the Paycheck Protection Program (PPP) beyond March 31, 2021. H.R. 1799 will be considered an NFIB Key Vote for the 117th Congress.

NFIB research indicates economic conditions remain challenging for our nation's small businesses. According to NFIB's latest monthly survey, small business optimism remains below its historic 47-year average. Small business owners expecting better business conditions over the next six months remains at a net negative 19%, a poor reading. Moreover, the economic recovery continues to be uneven for small businesses, especially those still managing state and local regulations and restrictions, with 15% recently reporting that they will have to close their doors if current economic conditions do not improve over the next six months.

Many small business owners are continuing to evaluate their financial needs as they assess the future of government restrictions on their businesses as well as progress in controlling the COVID-19 pandemic. Unfortunately, the timeframe for making decisions regarding a first or second draw PPP loan after passage of the Consolidated Appropriations Act of 2021 has been short, particularly as Congress and the Administration have recently made additional changes to the program.

For these reasons and given the high level of uncertainty over future economic conditions, it makes sense to extend the authorization of the PPP program through May 31, 2021 to give small businesses additional time to consider their needs and apply. NFIB is also pleased that this legislation will provide an additional 30 days for SBA to process pending applications, which will help to ensure small businesses are not unfairly harmed by PPP processing delays, which continue to pose a challenge to the program.

NFIB supports H.R. 1799, the PPP Extension Act of 2021 and will consider final passage of the legislation as an NFIB Key Vote for the 117th Congress. Sincerely, Kevin Kuhlman, Vice President, Federal Government Relations, NFIB.

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Ms. COLLINS. Mr. President, I urge all of our colleagues to vote yes on this bill, which will provide a crucial 2-month extension for the Paycheck Protection Program.

This program has been a lifeline to countless small businesses and has saved more than 50 million jobs in this country.

I salute my colleagues Senator Cardin and Senator Shaheen for their work on this extension, which was overwhelmingly passed by the House.

Let's talk about briefly what would happen if we do not act. If we do not act, there are approximately 190,000 loans still under review, which prevents any of these businesses from receiving a second PPP loan. These small businesses need this assistance now in order to pay their employees and stay afloat during this pandemic.

We cannot wait. The House has gone home. We cannot allow an interruption of this vital program that has made such a difference to our small businesses and their employees.

I urge all of my colleagues to support this 2-month extension, with an additional month for SBA to review the applications. Vote on H.R. 1799

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