Deputy Young Kim, R-Calif., Calls for legislation to extend the deadline for PPP loan applications until the end of May.
The Senate voted this week to extend the Paycheck Protection Program for two months amid concerns that the March 31 maturity of the small business rescue fund could leave struggling employers without a key economic lifeline. .
Senators voted 92 to 7 to pass the 2021 PPP Extension Act, postponing the program’s deadline to May 31 and giving the Small Business Administration (SBA) another 30 days to process pending orders.
President Biden has indicated that he will sign the legislation, which will be sent to his desk next week. The House of Representatives already passed the 2021 PPP Extension Law last week on a bipartisan basis.
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Congress created the bailout fund, which provides forgivable government-backed loans to small businesses if they keep their payroll, a year ago with the passing of the $ 2.2 trillion CARES Act. In total, lawmakers approved about $ 806 billion in funding for the program.
This year, through March 7, the PPP approved 2.4 million loans worth about $ 165 billion, just over half of the $ 284 billion allocated to the program when it reopened in January. In comparison, the program distributed about $ 525 billion in forgivable loans to 5.2 million companies over about four months in 2020, saving about 50 million jobs, according to the SBA.
With the program’s recent eligibility changes, however, some experts feared that there was not enough time to help small businesses that still need access to the fund. In a statement earlier this month, the American Institute of Certified Public Accountants called the March 31 deadline “unrealistic” and urged Congress to extend it by at least 60 days.
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Others, including the United States Chamber of Commerce, suggested that the program should be extended throughout the year. A group of more than 100 commercial organizations asked Congress to extend the program until at least June 30.
According to the new rules announced by the Biden government at the end of February, companies with fewer than 20 employees were given an exclusive two-week period to apply for loans. Larger companies will be excluded from the program during this period, as part of an effort to ensure that the most affected companies receive the help they need.
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The original eligibility criteria were resumed once the 14 days ended on Tuesday: any company with fewer than 500 employees can apply for an initial loan, and any company that has already received a PPP loan can apply for a second if employ less than 300 workers
Companies can choose to spend the funds for any period of time between eight and 24 weeks. At least 60% of the money must be spent on maintaining the payroll to receive full forgiveness.
The interest rate is still 1%.