Deadline Extended for PPP Loan Applications
The U.S. Senate passed legislation (PPP Extension Act of 2021) on March 25, 2021 that provides a 60-day extension for eligible employers to apply for a Paycheck Protection Program (PPP) loan. The House of Representatives approved the legislation on March 16, 2021.
The application deadline was set to expire on March 31, 2021, but now employers have until May 31, 2021. The act also gives the Small Business Administration (SBA) an additional 30 days — through June 30, 2021 — to process the loan applications filed by the end of May.
The PPP was created as part of the CARES Act, signed into law in March of 2020. Subsequent legislation, the Consolidated Appropriations Act, 2021 (CAA), which included $284 billion additional funding and the American Rescue Plan Act of 2021 (ARPA), which included $7.25 billion additional funding, expanded the forgivable expenses that borrowers can pay with the funds, made more employers eligible borrowers and created a second draw of PPP loan funds that is more targeted to very small companies with decreased revenue.
The PPP Extension Act does not provide any additional funding for the PPP beyond that provided in the CAA and ARPA, however it does provide access to the approximately $80 billion that has not yet been disbursed to eligible businesses.
UPDATE: President Biden signed the PPP Extension Act into law on Tuesday, March 30, 2021.
The SBA’s new checks and balances that are applied to second draw loan requests slowed the disbursement of funds. Also, many newly eligible borrowers did not have guidance from the SBA on how to apply the rules when making their application until the March 31, 2021 deadline was imminent.
The additional 60 days to apply for a PPP loan is a crucial measure to help ensure that the earmarked funds can reach the program’s intended recipients.
For additional information on PPP loan eligibility and forgiveness, please connect with MFA’s PPP Advisory Team.
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