On March 30th, 2021, President Joseph R. Biden signed the PPP Extension Act of 2021. The new bill extends the Paycheck Protection Program (PPP) application deadline to May 31st, 2021. Previously, the deadline for PPP applications expired on March 31st. The PPP Extension Act also provides an additional 30-day period for the Small Business Administration (SBA) to process pending applications. Earlier, in January 2021, the Consolidated Appropriations Act of 2021 (CAA) revised the PPP, including PPP loan forgiveness.
Previous Updates to the PPP
On February 22nd, 2021, the White House announced updates to the PPP involving small businesses’ eligibility. For example, in a newly released fact sheet, the Biden Administration outlined a proposal that included the following:
- a period of exclusive access to the program for tiny businesses;
- modifying the loan amount calculation for sole proprietors, independent contractors, and self-employed individuals; and
- expanding the eligibility rules.
Recent PPP Statistics
The signing of the PPP Extension Act followed the SBA’s latest report on PPP statistics. For instance, on March 29th, 2021, the SBA announced that the agency has:
- Guaranteed 3.58 million PPP loans totaling more than $211.8 billion in the 2021 PPP funding round.
- Guaranteed 8.7 million PPP loans totaling more than $734 billion as part of the PPP (in both 2020 & 2021)
- The average 2021 PPP loan is $59,000, and over 78.4% of these loans have been for $50,000 or less.
- 5% of 2021 PPP loans (more than 1.56 million) are First Draw PPP loans. Specifically, nearly 98% of those loans are for businesses with ten or fewer employees. This fact showcases the Biden administration’s promise to provide new – and the smallest – businesses with critical relief.
- Additionally, the SBA awarded over 1.55 million Second Draw PPP loans (over $48.7 billion) to businesses with ten or fewer employees.
In conclusion, with the passage of the PPP Extension Act, employers have an additional opportunity to apply for PPP funding. Although the deadline is May 31st, employers looking for PPP loans should apply for funding as soon as possible. Also, any small businesses previously denied PPP eligibility should reapply, as they may now be available for financing. Above all, employers need to watch for any information released by the SBA for further application instructions or date changes.