UPDATE: March 31, 2021: President Joe Biden signed the legislation Tuesday, calling it a "bipartisan accomplishment," according to Bloomberg.

Dive Brief:

• The Senate on Thursday passed, by a 92-7 vote, a bill that would extend the deadline for Paycheck Protection Program (PPP) applications for another two months to May 31.

• The PPP Extension Act, which also gives the Small Business Administration (SBA) until June 30 to close pending PPP applications, now awaits President Joe Biden's signature.

• The program, which provides forgivable loans to small businesses affected by the coronavirus pandemic, was scheduled to expire March 31.

Dive Insight:

The extension will come as welcome relief for the nation's small businesses with pending PPP applications, which, according to Sen. Susan Collins, R-ME, is close to 200,000.

"If we do not act, there are 190,000 pending applications for loans that will be in limbo," she said during a speech on the Senate floor Thursday, according to Roll Call. "These small businesses need this assistance now in order to pay their employees and stay afloat."

The bill, which House lawmakers passed by a 415-3 vote last week, has garnered support from the nation's bank and business groups.

"ICBA thanks Congress for quickly passing this much-needed extension of the Paycheck Protection Program to ensure small-business and nonprofit applicants are not stranded by an abrupt shutdown," ICBA President and CEO Rebeca Romero Rainey said in a statement Thursday. "With community banks providing more than 60 percent of PPP loans and saving an estimated 33.7 million jobs, we strongly support ensuring every potential borrower that needs a loan gets one."

American Bankers Association President and CEO Rob Nichols urged Biden to quickly sign the legislation into law.

"This legislation will help ensure that small businesses that have already applied for a PPP loan will be able to get that loan processed, rather than risk seeing this program end before their paperwork can be completed," he said.

Senate Small Business Committee Chair Ben Cardin, D-MD, said lawmakers must now "continue working in a bipartisan manner to fine-tune PPP to support as many small businesses as possible through the remainder of the program."

The Biden administration has already enacted several changes to the PPP in an effort to ensure the smallest businesses aren't excluded from receiving aid.

Those new rules included implementing a two-week window for the smallest businesses, as well as allowing sole proprietors, independent contractors and the self-employed to use gross income rather than net profit to calculate the amount of PPP funding they should receive.

Applications processed after the new guidance was announced but before the SBA's system was updated, however, were calculated using the old formula, leaving some applicants with much less than the new formula would have gotten them.

Bank trade groups and small business advocates say lenders and borrowers need the extra application time.

About 13% of small-business owners said they will need to shut down unless the economy improves within six months, according to a survey released Thursday by the National Federation of Independent Business (NFIB).

"The overall recovery remains uneven across small business industries," Holly Wade, executive director of NFIB's Research Center, said in a statement. "It is crucial that small businesses are given the resources and flexibility needed to ensure they will have a successful recovery."

Extra fraud checks put in place by the SBA during the latest PPP round have contributed to processing delays, an issue Patrick Kelley, the SBA's associate administrator, said the agency is working to address.

The SBA is preparing to deploy a "machine learning tool" to help address the application backlog, Kelley told senators Thursday, according to Politico.

Meanwhile, the House Select Subcommittee on the Coronavirus Crisis said nearly $84 billion in coronavirus crisis lending under the PPP and Economic Injury Disaster Loan (EIDL) programs may be fraudulent. The Justice Department has recovered $626 million of disbursements, the subcommittee added.

About 3.1 million PPP loans, totaling nearly $196 billion, have been approved since the relaunch of the program in January, according to SBA data released Sunday. The SBA has approved 8.2 million loans totaling $718 billion since last April.

The $1.9 trillion stimulus plan Biden signed this month includes $7.25 billion in additional PPP funding. About $79 billion in PPP funding remains available, Bloomberg reported Thursday, citing SBA figures.