Senate Passes PPP Deadline Extension to May 31, 2021
Everything you need to know about the new PPP deadline and what’s to come in 2021.
The Senate has passed a bill that would extend the deadline for businesses seeking assistance from the Paycheck Protection Program (PPP). Businesses now have until May 31, 2021 to submit applications. The PPP Extension Act of 2021 also gives the Small Business Administration (SBA) an additional 30 days after May 31 to process any loans. Without the extension, the PPP application period was slated to end on March 31, 2021. This timeline would have prevented approximately 190,000 small businesses from securing loans despite their pending applications.
On February 22, President Joe Biden announced changes to the second draw PPP in which the SBA established an exclusive 14 day period for businesses and nonprofits with fewer than 20 employees to submit applications. This was to ensure that even the smallest of businesses could receive the help they needed before the original program deadline of March 31.
To strengthen the relationship between the SBA and lending partners for the advancement of equity goals, fund delivery, and the prevention of fraud, waste, and abuse, the Biden’s administration also:
Additionally, for 2021 PPP loans, Congress seeks to reach small, low-, and moderate-income (LMI) businesses that had not received relief. To support these applicants, Congress has set aside $15 billion for small and LMI First Draw borrowers.
The SBA is currently implementing the American Rescue Plan Act that President Biden signed into law on March 11th. The American Rescue Plan Act provides additional relief for small businesses across the nation, especially for hard-hit industries. Here’s what it has in store:
The SBA offers several options to help businesses, nonprofits, and faith-based organizations find relief during the COVID-19 pandemic. The current process of finding the right relief option for you and applying includes:
The National Federation of Independent Businesses stated that nearly one in every six small businesses will be forced to shut their doors if economic conditions do not improve within the next six months.
In an effort to financially support small businesses, The PPP was created as a part of the March 2020 Congress-approved CARES Act. The original PPP offered businesses employing 500 or fewer employees low-interest loans up to $10 million to cover pandemic-related costs. Companies applied for the money through banks and lenders that certify the loans underwritten by the SBA. As we know, the government is continuing to put special focus on small businesses and nonprofits so people can get the funding they need to survive the pandemic.
Maine GOP Senator Susan Collins, a co-sponsor of the bill that extended the PPP deadline, cited that nearly 200,000 businesses are counting on the program's continuation and that it has already saved 50 million jobs nationwide. Since the initiation of the PPP, the SBA has approved 8.2 million loans that total $718 billion. There is still more than $50 billion available for businesses from the amount that Congress has approved.
While many businesses are reopening, there is still economic strain as we return to a new normal. Businesses are still relying on support from these government programs. The first round PPP changes, deadline extension, and American Rescue Plan Act have been vital to helping businesses get back on their feet.
If you are one of more than 190,000 businesses waiting on the SBA to process your loan application, know that you are not alone. Hatch is looking to support you with Hatch Business Checking. Get the modern business checking account with no minimum balance requirements, no NSF fees, up to 5% cashback rewards on eligible debit card purchases, and discounts on business software.