The latest paycheck protection program overhaul seemed like a victory for the most vulnerable small businesses, offering more generous relief to businesses like sole proprietorships that were only eligible for small loans – or not at all. .

If only they could take advantage of the changes.

President Joe Biden announced a brutal overhaul two weeks ago to funnel more money to very small businesses, some of which qualified for loans as low as $ 1 under old guidelines. But the Small Business Administration didn’t update its systems until Friday, and with just three weeks until the program expires, some lenders say there’s just not enough time to adjust to the changes. .

The result was a stalemate and uncertainty that left tens of thousands of self-employed workers frantic to find lenders willing to make the most generous loans before the program ended on March 31. (The House Small Business Committee is scheduled to hold a hearing today on the status of the Paycheck Protection Program.)

JPMorgan Chase, the program’s largest lender this year in terms of dollars disbursed, does not plan to act on the new loan formula until it stops accepting requests on March 19. Bank of America, the second-largest lender, chose not to update its loan application and said it will contact independent applicants to manually sort their applications, but will not accept any news after Tuesday.

“We have 30,000 open requests and we want to allow enough time to complete the job and get each client’s request through the SBA process,” said Bill Halldin, spokesperson for Bank of America.

Even the lenders who will offer the loans until the congressional deadline have not been able to reprogram their systems until the Small Business Administration officially updates the rules and begins accepting applications with the formula. revised loan.

“It seems so arbitrary and chaotic,” said Paul Hastings, a freelance graphic designer in Los Angeles who applied for a loan on Feb. 24, two days after Biden announced the changes.

Hastings applied through SmartBiz, a broker that outsources its apps to a network of lenders. He assumed his application would be automatically updated to take advantage of the new rules, but on Monday he received a form letter telling him his loan had been processed under the previous rules.

The letter gave Hastings two choices: accept the proposed loan – for an amount thousands of dollars less than he would get under the new rules – or cancel his application and start over. But if he did that, the letter warned, he might not get a loan at all before the deadline.

“I don’t know yet what I’m going to do,” he said.

SmartBiz representatives did not immediately respond to a request for comment.

Aged business owners have flocked to forums like Reddit to analyze their options and exchange advice on which lenders are using the new formula and which are not. “Desperate to be guided! a typical message reads. “I’m looking to see if anyone can help me understand this absolutely monstrous failure.”

The disarray is compounded by the other major change Biden announced last month: a 14-day window, which ended on Tuesday, during which the Small Business Administration would only accept applications from companies under 20 employees. The intention was to help businesses in need, especially those run by women and minorities. The vast majority of these companies are sole proprietorships that would benefit from the new formula, and many have rushed to take advantage of the priority period.

DISAGREEABLE OPTIONS

But the nearly two-week delay in implementing the more generous rules put lenders in a difficult position: They could suspend sole proprietorship claims, creating a backlog that they would later have to clear, or they could. approve applications according to the previous formula, which translates into much smaller loans for their clients.

Biz2Credit, which has made more loans this year than any other lender, has temporarily stopped accepting applications as it struggles to adjust to the new rules. It plans to resume this week, said Rohit Arora, its chief executive.

Other major lenders, including Cross River Bank and Customers Bank, which round out the program’s top five lenders, said they started processing loans on Monday using the new formula.

Matthew Coleman, spokesperson for the Small Business Administration, declined to comment on the time it took to update the rules, but said the changes “gave a stronger hand” to companies left behind. .

Even before the changes announced last month, lenders were trying to unravel important errors and data verification issues that had stalled tens of thousands of requests. It would take an act of Congress to extend the deadline, and lenders and business groups are asking, with increasing urgency, for an extension.

The American Institute of Certified Public Accountants called the March 31 deadline for the overall program “unrealistic,” and 10 banking groups sent a letter to lawmakers last week urging Congress to give them more time.

The Biden administration did not ask for an extension, but top congressional leaders have said they are ready to pass legislation that extends the deadline.