(The Center Square) – Virginia businesses will benefit from the federal government extending the deadline for applying for loans for the Paycheck Protection Program, industry organizations said.
With the support of both parties, the federal legislature passed a law extending the loan application from March 31 to May 31, giving the Small Business Administration an additional 30 days to process the applications. The legislation is expected to be signed by President Joe Biden.
The loans allow companies that have been economically damaged by the COVID-19 pandemic and subsequent economic restraints to borrow money from the federal government. If companies use the money according to federal guidelines, the loans will be granted, which means the companies won’t have to repay the money.
The money raised through these loans is designed to help companies maintain payroll at a time when revenues are still low and some industries are laying off workers.
The loans will help “keep the companies alive for a few more months” as the pandemic hopefully comes to an end, Nicole Riley, Virginia state director for the National Federation of Independent Business, told The Center Square. She said her members were excited to hear the deadline was quickly extended before it expired.
Riley said the loans have helped many small businesses in industries hardest hit by the pandemic. She said the relief bill, passed earlier this month, will particularly help restaurants and the entertainment industry, which are harder hit than most. Legislation gives these companies access to more money than some other companies.
However, another association said hotels should be given more priority as they struggled with fewer travelers and the inability to hold large gatherings. Financial recoveries for the hotel industry have been much slower than for some other industries, Robert Melvin, director of government affairs at Virginia Restaurant, Lodging & Travel Association, told The Center Square.
However, extending the PPP loan applications is helping many association members, Melvin said. He said federal lawmakers should try to make the money available to businesses as much as possible. The association has also worked with state lawmakers to help businesses recover.
Riley said the NFIB is watching what the state government is doing with the federal funds provided for in the relief bill. She said the association is encouraging lawmakers to use funds to top up unemployment insurance funding to avoid a future tax hike for businesses while they are still recovering from the pandemic. If the money is available, the state should also consider using the federal money to support the Rebuild Virginia program, which funds companies struggling during the COVID-19 pandemic.