Lowenstein Joins Start Small Think Big and Other Public Interest Organizations in Urging Federal Government to Extend PPP Application Deadline and Further Improve PPP to Support Microbusinesses

Lowenstein Sandler, Start Small Think Big, and other public interest organizations and small business advocates have sent a letter to leaders of the U.S. Administration and Congress asking for the Paycheck Protection Program (PPP) to be extended through December 31, 2021, with additional improvements to make the program more responsive to the financial needs of microbusinesses, many of which are owned by people of color and women.

The signatories to the letter, which is addressed to President Joseph R. Biden, Vice President Kamala D. Harris, Senate Majority Leader Charles E. Schumer, Speaker of the House Nancy P. Pelosi, Senate Minority Leader Mitch McConnell, and House Minority Leader Kevin O. McCarthy, ask that the Administration and Congress:

• Extend the deadline for borrowers to submit their PPP applications to December 31, 2021
• Allow self-employed borrowers to add to their existing PPP loans
• Issue clear guidance on the interplay of unemployment assistance and PPP funding
• For borrowers with no employees, eliminate the requirement that 60 percent of funding be spent on payroll costs
• Permit full loan forgiveness for all loans up to $150,000, even if borrowers had to reduce work force or wages to survive the pandemic

These improvements are intended to ensure that more historically disenfranchised and disadvantaged borrowers can fully benefit from the program. To date, many self-employed people and microbusiness owners have received only meager PPP funding or have not received a PPP loan at all.  Uncertainty about a borrower’s ability to apply for a PPP loan while receiving unemployment benefits, as well as confusion about the PPP forgiveness process, continues to deter many eligible borrowers from applying for a PPP loan. 

The Administration recently took steps to make PPP loans more accessible to the smallest borrowers.  On February 22, the Administration designated a two-week period ending March 9 during which only borrowers with 20 or fewer employees could apply for PPP loans. On March 3, the SBA released a revised loan calculation formula that allows self-employed borrowers to receive larger loans. This flurry of changes very close to the program’s end date, while well-intentioned, caused confusion among borrowers and left many important issues unaddressed. The letter states: “We . . . welcome the Administration’s focus on ensuring equitable access to PPP funding for historically marginalized borrowers . . . . However, we are deeply concerned that the PPP, as it currently stands, does not go far enough to advance the Administration’s lending equity goals.” 

On September 29, 2020, Start Small Think Big joined 35 partner organizations, including Lowenstein, to urge Congress to immediately restart the PPP and adopt specific improvements to make the program more responsive to the financial needs of microbusinesses employing 10 or fewer employees. Recent improvements to the program have aligned with those previous recommendations, but further action is needed. With the program slated to close on March 31, the letter states: “Now remains an urgent and opportune time for Congress and the Administration to work together to make additional improvements to the PPP to ensure that microbusiness owners . . . actually benefit from the program.”

Start Small Think Big is a nonprofit organization that provides free legal, financial, and marketing services to under-resourced entrepreneurs around the country. Ninety-five percent of its clients are people of color or women business owners.

The letter’s signatories include: Jennifer DaSilva, Founder & Executive Director, Alex Stepick, Legal Program Director, and Stephanie Charles, Cleary Gottlieb Fellow, Start Small Think Big; Gary M. Wingens, Chair and Managing Partner, and Christina T. Holder, Corporate Public Interest Counsel, Lowenstein Sandler LLP; Chester County Chamber of Business & Industry; Jill Friedman, Associate Dean, Rutgers Law School Pro Bono and Public Interest Program; Latino Economic Development Center; Main Street Launch; Michael Winn, Director, Pro Bono & Externship Programs and Lecturer in Law, Levin Center for Public Service & Public Interest Law, Stanford Law School; Naveen Thomas, Director, Business Transactions Clinic, New York University School of Law; Norville Barrington, Vice President of Business Development & Communications, Metro New York Chapter, National Black MBA Association; Opportunity Fund; Professor Amelia Miazad, Director and Senior Research Fellow, Business in Society Institute, UC Berkeley School of Law; Sydney Groll and Stephanie Mignogna, Co-chairs, Know Your Rights Initiative, Rutgers Law School; and Volunteers of Legal Service.

The full text of the letter may be found here.

About Lowenstein Sandler LLP
Lowenstein Sandler is a national law firm with over 350 lawyers based in New York, Palo Alto, New Jersey, Utah, and Washington, D.C. The firm represents leaders in virtually every sector of the global economy, with particular emphasis on investment funds, life sciences, and technology. Recognized for its entrepreneurial spirit and high standard of client service, the firm is committed to the interests of its clients, colleagues, and communities.