Last night, in a surprising move, the U.S. Senate unanimously approved legislation to extend the PPP program through August 8. The PPP has $130 B of funds still available. The bill will now likely be approved by the House and move to President Trump’s desk for signature.
I don’t think this is a good use of time or resources. Demand for PPP loans has slowed to a trickle over the last few weeks, and it’s unlikely that this will change with the extension. Lenders are exhausted and eager to move on with the complex forgiveness process.
It’s time to move on with whatever the next level of relief programs will be, and put the PPP to rest.
As I have mentioned before, the SBA community has done an exceptional job helping in prior recoveries. By increasing guarantees on this flagship program to 90% and reducing fees, incentives should increase for borrowers and lenders to leverage it. It’s hard for lending teams to focus on executing a program like this if they are still stuck in the PPP process.
I hope that whatever Congress decides to do next will consider utilizing the existing SBA resources and infrastructure. They might find additional incentives for industries that have been hit particularly hard.
There is no need to reinvent the wheel and design an entirely new program as they did with PPP and the Main Street Lending Program. Let's leverage the good old fashioned SBA – it works.
The PPP extension legislation is a cute headline, but a distraction from the hard work ahead.