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Borrowers facing March 31 deadline for PPP loans, only 40% of funding remains

Domenico Ciaccio, a vice president and business banking

Domenico Ciaccio, a vice president and business banking manager at Ridgewood Savings Bank. Credit: Ridgewood Savings Bank

With less than 40% of Paycheck Protection Program funding still available and two weeks left for the loans to be approved, lenders are encouraging small businesses and nonprofits to apply now.

The second round of Washington’s marquee COVID-relief initiative for employers will shut down on March 31, regardless of whether all of the $291 billion in federal loan guarantees are exhausted.

The PPP loans, which are made by banks and other private lenders, come with a 1% interest rate and five-year term.

Domenico Ciaccio, a vice president and business banking manager at Ridgewood Savings Bank, said the PPP has been "a lifeline" for employers struggling to survive the coronavirus pandemic. "We’re urging all interested small businesses and nonprofit organizations to submit their PPP application as soon as possible before the SBA sunsets the program," he said.

Ridgewood has made 159 loans in the metropolitan area so far in the second round of PPP, totaling $10 million. Long Island borrowers received 44 of the loans, totaling $3 million, or 27%, according to the Queens-based bank which has eight offices in Nassau and Suffolk counties.

First-time PPP borrowers, under a law approved by Congress and then-President Donald Trump in December, may receive loans of up to $10 million and second-time borrowers, up to $2 million. First-time borrowers must have 500 or fewer employees while second-time borrowers must have 300 or fewer.

The loans must be approved by the U.S. Small Business Administration and are forgivable if the terms are met. Newsday received a $10 million loan in April.

SBA has approved 2.7 million loans since January, totaling $181.5 billion. Borrowers in New York State received 182,944 loans, totaling nearly $15 billion — the second most in the country after California. Data for Long Island wasn’t immediately available from the agency.

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There are efforts on Capitol Hill to extend the March 31 deadline.

On Tuesday, the House of Representatives passed a bill giving borrowers until May 31 to submit their PPP loan application and SBA until June 30 to grant approvals. The legislation’s fate in the U.S. Senate is uncertain.

"By providing small businesses with two more months to apply and giving SBA an additional month to process applications, we will help ensure critical support isn’t cut off," said Rep. Nydia Velazquez (D-Brooklyn), who sponsored the bill as chairwoman of the House’s small business committee. She called on the Senate "to act quickly to send this legislation to President [Joe] Biden’s desk."

The latest stimulus package includes an additional $7.25 billion in loan guarantees for the PPP as well as $15 billion more for Economic Injury Disaster Loan Advance grants from SBA. The package also provides more funding to hard-pressed restaurants and live entertainment venues.

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PPP By The Numbers

March 31: deadline for loan applications to be approved by the U.S. Small Business Administration

$291 billion: amount of federal loan guarantees authorized by Congress as of this month

5,000+: number of banks and other private lenders making PPP loans

1%: interest rate on PPP loans

5 years: term on PPP loans

SOURCE: U.S. Small Business Administration

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