President Biden is expected to sign the 2021 PPP Extension Law (“PPP”) passed by the House of Representatives on March 16, 2021 and the Senate on March 25, 2021. The bill extends the Payroll Check Protection Program (“PPP”) Funding Loan program until June 30, 2021, for first draw and second draw loan applications submitted by lenders to the SBA by May 31, 2021.
|Friday May 28, 2021||Last business day for lenders to submit first and second draw PPP loan applications|
|Monday May 31, 2021, Memorial Day||Last day SBA will accept new lender applications for first and second draw PPP loans|
|Wednesday June 30, 2021||Last day for SBA to process lender requests for first and second drawdown PPP loans submitted before May 31, 2021|
1. SBA backlog
The extension is good news for small businesses, especially given the backlog of SBA lender applications and the volume of applications that were not processed due to technical difficulties (i.e. .SBA error messages).
If you have a technical difficulty with your loan, you should work with your lender now to resolve it, as you may not want to resolve these issues in May.
2. May 28 could be the real deadline
It is unfortunate that no one looked at the calendar while drafting the bill to see that May 31 is Remembrance Day. So it’s not really a two-month extension since borrowers will need to ensure their applications are received by Friday, May 28, before the start of the Memorial Day long holiday weekend.
3. Opportunity for first-draw PPP loan borrowers
The extension is expected to be of particular benefit to first-draw PPP loan borrowers who received their loans in 2021. This can give you enough time to use these products and apply for a second-draw PPP loan by May 28.
4. $ 50 million in PPP loan funds remaining
The latest reports indicate that there is about $ 50 billion left in the PPP loan program.
5. Possible new rules to come
We expect to see further revisions to the PPP loan program in the coming weeks, including provisions that would allow sole proprietorships, freelance contractors and self-employed people who had previously applied for first-draw PPP loans under the rules. of the ASB in force before March 3. , 2021, to take advantage of the new SBA rules for sole proprietorships which came into effect on March 3, 2021. These rules allow sole proprietors, independent contractors and self-employed workers to obtain the PPP loan proceeds based on their income gross, instead of their net income, greatly increasing the loan amount available to these borrowers. To date, borrowers who received loans before March 3, 2021 have not been able to increase their loan amounts under the new rules.