WASHINGTON, D.C. - Last night, the U.S. Senate approved a bill to extend the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) application deadline. The bill extends the PPP authorization cutoff from June 30 to August 8, 2020, preserving funding for additional PPP loans. The bill now goes to the U.S. House of Representatives for consideration.
The Senate legislation also decouples the PPP authorization from the SBA 7(a) program, eliminating the risk that the regular 7(a) program could shut down when the PPP hits its authorization cap. More than $100 billion in relief is still available for small businesses. The bill does not include structural program fixes needed for the PPP to better serve business owners of color.
Center for Responsible Lending (CRL) Executive Vice President Keith Corbett released the following statement:
Extending the deadline is welcome news, but it’s a band-aid that doesn’t address the structural changes needed for the PPP to better serve business owners of color. Since the start of the crisis, businesses owned by people of color have been particularly hard hit. Active Black and Latino owned businesses have declined by 41% and 32%, respectively. Asian-American-owned businesses decreased by 26%. By comparison, active White-owned businesses declined by 17%.
These business owners of color are from the same communities that were the most adversely affected by the Great Recession, and unfortunately, they’re the ones most likely to have been underserved by the PPP. If this program isn’t fixed, then it will only compound inequities and widen the racial wealth gap. Businesses owned by people of color play a pivotal role in local economies across the country and contribute immensely to their communities. We can’t afford to leave these tax-paying businesses out of this important public relief program.
Along with a broad coalition of civil rights and community development advocates, CRL has consistently advocated for key fixes to the PPP that are critically important for ensuring that the smallest and most vulnerable businesses, including those owned by people of color, have sufficient access to PPP funding and forgiveness. Those improvements include:
- Streamlined forgiveness and safe harbor for borrowers that received small loans;
- Requiring the collection and reporting of data on borrower demographics and loan amounts; and
- Setting a minimum origination fee for the smallest loans to ensure that there is not a disincentive to serve the smallest businesses and sole proprietors.
Earlier this month, CRL's Director of Federal Advocacy Ashley Harrington testified before the U.S. House of Representatives' Committee on Small Business for a hearing titled, “Paycheck Protection Program: Loan Forgiveness and Other Challenges.” Her written testimony includes CRL’s analysis and policy recommendations for the PPP.
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Press Contact: ricardo.quinto@responsiblelending.org