The Senate on Thursday passed, by a 92-7 vote, a bill that would extend the deadline for Paycheck Protection Program applications for another two months to May 31.
The PPP Extension Act, which also gives the Small Business Administration until June 30 to close pending PPP applications, now awaits President Joe Biden's signature.
The program, which provides forgivable loans to small businesses affected by the coronavirus pandemic, was scheduled to expire March 31.
The extension will come as welcome relief for the nation's small businesses with pending PPP applications, which, according to Sen. Susan Collins, R-ME, is close to 200,000.
"If we do not act, there are 190,000 pending applications for loans that will be in limbo," she said during a speech on the Senate floor Thursday, according to Roll Call. "These small businesses need this assistance now in order to pay their employees and stay afloat."
The Biden administration has already enacted several changes to the PPP in an effort to ensure the smallest businesses aren't excluded from receiving aid. Those new rules included implementing a two-week window for the smallest businesses, as well as allowing 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.
Applications processed after the new guidance was announced but before the SBA's system was updated, however, were calculated using the old formula, leaving some applicants with much less than the new formula would have gotten them.
Bank trade groups and small business advocates say lenders and borrowers need the extra application time.
About 13% of small-business owners said they will need to shut down unless the economy improves within six months, according to a survey released Thursday by the National Federation of Independent Business (NFIB).
"The overall recovery remains uneven across small business industries," Holly Wade, executive director of NFIB's Research Center, said in a statement. "It is crucial that small businesses are given the resources and flexibility needed to ensure they will have a successful recovery."
Extra fraud checks put in place by the SBA during the latest PPP round have contributed to processing delays, an issue Patrick Kelley, the SBA's associate administrator, said the agency is working to address. The SBA is preparing to deploy a "machine learning tool" to help address the application backlog, Kelley told senators Thursday, according to Politico.
About 3.1 million PPP loans, totaling nearly $196 billion, have been approved since the relaunch of the program in January, according to SBA data released Sunday. The SBA has approved 8.2 million loans totaling $718 billion since last April.
The $1.9 trillion stimulus plan Biden signed this month includes $7.25 billion in additional PPP funding. About $79 billion in PPP funding remains available, Bloomberg reported Thursday, citing SBA figures.