Despite Dire Small-Business Need, $128 Billion in PPP Is to Due to Sunset March 31
The forgivable loan program is set to expire in four weeks--and as of now there are no plans to extend it.
With about $128 billion currently up for grabs, the Paycheck Protection Program will sunset at the end of this month--and, as yet, there are no plans to revive it.
Neither the House nor Senate versions of the latest $1.9 trillion stimulus package--dubbed the American Rescue Plan Act, which is expected to reach the President's desk by March 14--include an extension of the PPP. Though, lawmakers do earmark another $7.25 billion additional funding for the program, which kicked off again in mid-January with $284.5 billion. Lawmakers also intend to open it up to larger non-profits.
SBA Backlog
The Small Business Administration needs to clear thousands of Paycheck Protection Program loans now being held up within the agency’s system, a coalition of lender groups requested in a letter to lawmakers March 5.
Those loans, flagged by a tightened set of automated checks by the agency, could mean many small business are shut out of the program as the PPP deadline of March 31 fast approaches, groups including the American Bankers Association, the Credit Union National Association and the Independent Community Bankers of America, said in a letter to the House and Senate small business committees.
“With the approaching authorization expiration date of March 31, 2021, we have serious concerns that many of these loans currently tagged with a hold code will remain outstanding through this date,” the groups wrote. We also have concerns that new loans uploaded to SBA’s portal this month will be outstanding when the portal shuts down. As a result, those businesses that should have been eligible to receive PPP funds – including those in hardest hit communities who may not have taken advantage of PPP last year – will be locked out and unable to access this much needed emergency capital.”
The forgivable loan program, which has helped more than 7.3 million businesses access more than $679 billion in aid, is largely expected to end with money left over. However, business groups and owners themselves say more time is needed to help those that have, thus far, been unable to gain access to the offering.
Pointing to troubling survey data from August--showing still high levels of concern among U.S. businesses--a coalition of business groups led by the U.S. Chamber of Commerce sent a letter to lawmakers this week, urging them to extend the PPP through December 31, 2021. "Small businesses continue to struggle, especially minority-owned businesses," the business leaders wrote. "Extending the PPP deadline through the end of this year will ensure that the segment of small businesses facing the greatest obstacles do not get left behind."
In other words, it's still necessary. While the first round of PPP, which amounted to $349 billion, was exhausted in about two weeks, as banks routinely favored their existing and bigger ticket clients, this latest round has been marked by delays.
If second-draw PPP borrowers weren't mistakenly rejected outright for one reason or another, widespread delays affected legions of other borrowers. As many as one third of second-draw applicants received requests for more information, after the Small Business Administration's automated PPP system increasingly returned error codes arising from everything from mismatched data between one round to the next to straight up wrong information--like applicants who were told, incorrectly, that they had criminal records.
According to the American Institute of CPAs (AICPA), as many as 40 different potential error codes are causing additional validation checks, which can delay loan approvals for weeks. Lenders were eventually given tools to resolve these issues, however delays continue to be a source of consternation among business owners.
The forgivable loan program is set to expire in four weeks--and as of now there are no plans to extend it.
With about $128 billion currently up for grabs, the Paycheck Protection Program will sunset at the end of this month--and, as yet, there are no plans to revive it.
Neither the House nor Senate versions of the latest $1.9 trillion stimulus package--dubbed the American Rescue Plan Act, which is expected to reach the President's desk by March 14--include an extension of the PPP. Though, lawmakers do earmark another $7.25 billion additional funding for the program, which kicked off again in mid-January with $284.5 billion. Lawmakers also intend to open it up to larger non-profits.
SBA Backlog
The Small Business Administration needs to clear thousands of Paycheck Protection Program loans now being held up within the agency’s system, a coalition of lender groups requested in a letter to lawmakers March 5.
Those loans, flagged by a tightened set of automated checks by the agency, could mean many small business are shut out of the program as the PPP deadline of March 31 fast approaches, groups including the American Bankers Association, the Credit Union National Association and the Independent Community Bankers of America, said in a letter to the House and Senate small business committees.
“With the approaching authorization expiration date of March 31, 2021, we have serious concerns that many of these loans currently tagged with a hold code will remain outstanding through this date,” the groups wrote. We also have concerns that new loans uploaded to SBA’s portal this month will be outstanding when the portal shuts down. As a result, those businesses that should have been eligible to receive PPP funds – including those in hardest hit communities who may not have taken advantage of PPP last year – will be locked out and unable to access this much needed emergency capital.”
The forgivable loan program, which has helped more than 7.3 million businesses access more than $679 billion in aid, is largely expected to end with money left over. However, business groups and owners themselves say more time is needed to help those that have, thus far, been unable to gain access to the offering.
Pointing to troubling survey data from August--showing still high levels of concern among U.S. businesses--a coalition of business groups led by the U.S. Chamber of Commerce sent a letter to lawmakers this week, urging them to extend the PPP through December 31, 2021. "Small businesses continue to struggle, especially minority-owned businesses," the business leaders wrote. "Extending the PPP deadline through the end of this year will ensure that the segment of small businesses facing the greatest obstacles do not get left behind."
In other words, it's still necessary. While the first round of PPP, which amounted to $349 billion, was exhausted in about two weeks, as banks routinely favored their existing and bigger ticket clients, this latest round has been marked by delays.
If second-draw PPP borrowers weren't mistakenly rejected outright for one reason or another, widespread delays affected legions of other borrowers. As many as one third of second-draw applicants received requests for more information, after the Small Business Administration's automated PPP system increasingly returned error codes arising from everything from mismatched data between one round to the next to straight up wrong information--like applicants who were told, incorrectly, that they had criminal records.
According to the American Institute of CPAs (AICPA), as many as 40 different potential error codes are causing additional validation checks, which can delay loan approvals for weeks. Lenders were eventually given tools to resolve these issues, however delays continue to be a source of consternation among business owners.
NW Valley Could See a New Regional Tourism Asset!
Residents of NW Valley could see a major gambling expansion in Arizona, and the Tohono O'odham eye property near Loop 303 Northern Parkway. "This is a major announcement, not only for jobs, but will be become our newest regional tourism asset along with the White Tank Regional Park, Wildlife Zoo and Surprise Stadium" said Raoul Sada, president and CEO of the Chamber
The decision was part of an agreement between the city of Glendale and the Tohono O'odham Nation, which already operates the Desert Diamond Casino West Valley. The Glendale council also agreed not to interfere with the tribe's plans to build further west, and to publicly support a new casino. "
The current state gaming compact limits the Tohono O'odham Nation to four gaming facilities in Arizona, which it has near Tucson, Glendale, Sahuarita and Why. This newly proposed location would be a fifth.
The southern Arizona-based tribe was able to build the West Valley casino, far from most of its reservation, by making use of a 1980s settlement to replace tribal land that was damaged by flooding. The federal settlement allows the tribe to purchase replacement land in unincorporated areas and apply to have it designated as reservation land. The Tohono O'odham Nation would have to go through the same process with this new location.
The deal between Glendale and the Tohono O'odham Nation will bring some cash Glendale's way. The agreement outlines:
A one-time $400,000 payment to Glendale for signing the Feb. 9 agreement. The payment is "to help fund the operations of the city," according to the agreement. $1 million per year, plus an additional 2% each year, for 20 years once gaming begins.
Residents of NW Valley could see a major gambling expansion in Arizona, and the Tohono O'odham eye property near Loop 303 Northern Parkway. "This is a major announcement, not only for jobs, but will be become our newest regional tourism asset along with the White Tank Regional Park, Wildlife Zoo and Surprise Stadium" said Raoul Sada, president and CEO of the Chamber
The decision was part of an agreement between the city of Glendale and the Tohono O'odham Nation, which already operates the Desert Diamond Casino West Valley. The Glendale council also agreed not to interfere with the tribe's plans to build further west, and to publicly support a new casino. "
The current state gaming compact limits the Tohono O'odham Nation to four gaming facilities in Arizona, which it has near Tucson, Glendale, Sahuarita and Why. This newly proposed location would be a fifth.
The southern Arizona-based tribe was able to build the West Valley casino, far from most of its reservation, by making use of a 1980s settlement to replace tribal land that was damaged by flooding. The federal settlement allows the tribe to purchase replacement land in unincorporated areas and apply to have it designated as reservation land. The Tohono O'odham Nation would have to go through the same process with this new location.
The deal between Glendale and the Tohono O'odham Nation will bring some cash Glendale's way. The agreement outlines:
A one-time $400,000 payment to Glendale for signing the Feb. 9 agreement. The payment is "to help fund the operations of the city," according to the agreement. $1 million per year, plus an additional 2% each year, for 20 years once gaming begins.
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Lagoon Water Park, Entertainment Venue Headed to West Valley.... A new regional tourism asset for the NW Valley!
A beach party in Arizona might not be such a wacky idea in a couple of years because the West Valley will soon be home to an 11-acre beach lagoon, planned to include scuba diving, windsurfing and water jet packs as part of a 48-acre entertainment destination. TV News Story The planned project be near the Westgate Entertainment, near E 95th Avenue and Cardinals Way, near the State Farm Stadium. The developer of the project is ECL Glendale LLC. Crystal Lagoons Island Resort, will have a similar feeling to Downtown Disney, with experiential retail, amusement park rides, a 4D theater, a themed hotel and other hotel uses on the site. The project will also include an “aero bar,” a bar in the middle of the lagoon on a vertical structure that becomes elevated 135 feet in the air so patrons can get a 360-degree view. It also will include the world’s largest helium balloon. The balloon will be on a tether with a gondola that raises riders 400 feet in the air. The 4D theater will incorporate sensory elements like smell, temperature or moisture into the viewers’ experience. The theater will be in conjunction with SimEx-Iwerks Entertainment, which has access to Disney proprietary character and products. |
Industrial Construction Report
Phoenix is on track for a record level of new industrial supply to be completed in 2020, but so far new supply has outpaced demand, according to CoStar research. According to data compiled by Jessica Morin, director of market analytics for CoStar “Phoenix ranks ninth for U.S. markets with the most industrial space under construction. When the space under construction is completed, it will expand the market’s existing stock by 3.1%. That being said, Glendale and Goodyear have the most space under construction as compared to their existing space. Glendale will add about 40% to its inventory and Goodyear will add about 20% when the space under construction is completed. Nationwide, industrial net absorption was forecast to remain negative through the remainder of 2020 and into the beginning of 2021, according to a study done by NAIOP. However, Arizona has not seen the steep decline some other markets have suffered, Suzanne Kinney, president and CEO of the Arizona chapter of NAIOP said. “There have been a handful of large deals that have gone our way,” Kinney said, adding that several manufacturers have recently moved or expanded in Phoenix recently, and users like food and beverage makers are also growing in the area. Some of the growth, such as the pivot by Honeywell in Phoenix to make personal protective equipment, were directly related to the Covid-19 pandemic, Kinney said, but other moves were “a continuation of the positive trends we’ve seen over the past few years.” |
PPP Loans helped nearly 1,500 local businesses
A new Surprise Regional Chamber of Commerce report showed almost 1,500 small businesses in the Northwest Valley have received $155 million in PPP loan assistance.
Based the Chamber’s latest data, the PPP loans helped to retain 6,879 workers in the region (El Mirage, Sun City, Sun City West, Surprise, Waddell and Youngtown.) However, several small businesses in Surprise and surrounding areas are still suffering from the COVID-19 slowdown and waiting for Congress to act on additional bailout money.
“When the previous bailout programs were rolled out there was much confusion and turbulence, and small businesses did not initially fair well,” Chamber President and CEO Raoul Sada said. “The Chamber wants to do its part, making sure that does not happen again, and we are lobbying Capitol Hill for a packages that favor small businesses.”
Key Points:
•The SBA has just released a massive trove of data on PPP loans. This was a significant step forward in transparency by the government, prior to this the SBA resisted requests to share the recipients of the funds. This is why it is so important for the Chamber to hold government officials accountable, and for us to demand transparency at all levels of government (local, state and federal!)
•More than 81,000 Arizona businesses and nonprofits have received forgivable loans through the federal government's Paycheck Protection Program totaling $8.6 billion, according to the U.S. Small Business Administration.
•The Paycheck Protection Program, which was designed to avert mass layoffs during the Covid-19 pandemic.
•PPP loans are not made by SBA. PPP loans are made by lending institutions and then guaranteed by SBA.
•According to the data, 58 businesses in Arizona received between $5 and $10 million, the maximum amount allowed under the program. But the vast majority of loans, approximately 86%, are valued under $150,000.
•Close to 1500 small businesses received PPP loans in the six cities that make up the Chambers service territory. The amount of cash infused into our local economy was over $154 million dollars! Based on application data, the loans help to retain 6,879 workers in our region.
•Approximately 42 businesses were non-profits (2.8% of the recipients)
Based the Chamber’s latest data, the PPP loans helped to retain 6,879 workers in the region (El Mirage, Sun City, Sun City West, Surprise, Waddell and Youngtown.) However, several small businesses in Surprise and surrounding areas are still suffering from the COVID-19 slowdown and waiting for Congress to act on additional bailout money.
“When the previous bailout programs were rolled out there was much confusion and turbulence, and small businesses did not initially fair well,” Chamber President and CEO Raoul Sada said. “The Chamber wants to do its part, making sure that does not happen again, and we are lobbying Capitol Hill for a packages that favor small businesses.”
Key Points:
•The SBA has just released a massive trove of data on PPP loans. This was a significant step forward in transparency by the government, prior to this the SBA resisted requests to share the recipients of the funds. This is why it is so important for the Chamber to hold government officials accountable, and for us to demand transparency at all levels of government (local, state and federal!)
•More than 81,000 Arizona businesses and nonprofits have received forgivable loans through the federal government's Paycheck Protection Program totaling $8.6 billion, according to the U.S. Small Business Administration.
•The Paycheck Protection Program, which was designed to avert mass layoffs during the Covid-19 pandemic.
•PPP loans are not made by SBA. PPP loans are made by lending institutions and then guaranteed by SBA.
•According to the data, 58 businesses in Arizona received between $5 and $10 million, the maximum amount allowed under the program. But the vast majority of loans, approximately 86%, are valued under $150,000.
•Close to 1500 small businesses received PPP loans in the six cities that make up the Chambers service territory. The amount of cash infused into our local economy was over $154 million dollars! Based on application data, the loans help to retain 6,879 workers in our region.
•Approximately 42 businesses were non-profits (2.8% of the recipients)
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