PPP loan deadline extension would help banks process more applications
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Late last week, the Senate passed a bill that will extend the current deadline for Paycheck Protection Program loans from March 31 to May 31. That bill is now headed to President Joe Biden’s desk. The extended deadline for the government’s forgivable business loans will come as a relief to many small business owners who have been scrambling to get their applications in this month.
The latest round of PPP loans came with additional requirements, including more compliance checks meant to prevent fraud. As a result, “the processing process has been far, far slower and more complicated than the first time around,” said Matt Hetrick of the accounting firm Harmony Group.
Earlier this month, Optus Bank in South Carolina stopped accepting applications so it could work through its backlog. CEO Dominik Mjartan said it’s started to accept them again, and by the May deadline, “we expect we’ll have over a thousand applications that we’ll have processed or touched.”
But, Mjartan said, many of those are from first-time borrowers whose applications tend to be more complex.
“And that’s why we’re worried about the pipeline of applications that are coming in,” he said. “We may get really bogged down.”
If that happens, Mjartan said the bank might have to stop accepting applications again to get through the backlog by May 31.
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