Senate Approves House Version of PPP Extension through May 31, Sending Bill to White House for Expected Signature
On March 25, 2021, the Senate voted 92-7 in favor of an extension of the Paycheck Protection Program (“PPP”) loan application deadline through May 31, 2021, consistent with the version of the PPP extension previously approved by the House of Representatives. The White House has already voiced its support of the extension, which the President is expected to sign into law before the current March 31, 2021 PPP application deadline.
In addition to the two month extension for borrower applications, the latest changes to the PPP will give the Small Business Administration (“SBA”) an additional thirty (30) days following the new May 31 application deadline to finish processing any then pending PPP loan applications.
The extended timeframes will afford SBA much needed additional time to address significant loan application process challenges that have hampered processing of applications by SBA and PPP lenders over the last several months, including confusing loan validation and error codes, delayed SBA guidance and changes to the PPP loan amount calculation for self-employed borrowers (among other issues).
Importantly, however, the measure passed by Congress does not appropriate any additional funding to the PPP, and an SBA representative testified in the Senate this week that the PPP would likely exhaust its existing appropriations in mid-April at the current lending rate. So, while eligible borrowers have some additional time to apply for first and second draw PPP loans, they should not count on funds being available all the way through the new May 31 application deadline.
Miller Johnson’s COVID-19 team will discuss the PPP extension and other recent small business funding developments during its regularly scheduled Monday morning “round-up” of key COVID-related developments at 8:00am on Monday, March 29. Please join us by registering here.