Biden signs law extending PPP for small businesses until May 31
President Biden on Tuesday enacted a two-month extension to the paycheck protection program a day before the coronavirus relief fund expired, giving small businesses until May 31 to apply for a forgivable loan.
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Senators voted 92-7 to pass the PPP Extension Law of 2021 last week, extending the program’s March 31 deadline and giving the Small Business Administration (SBA) an additional 30 days after that to process pending requests. The House of Representatives also passed the measure on a bipartite basis.
Congress established the program, which provides government-backed subsidies to small businesses if they maintain their payroll, a year ago with the passage of the $ 2.2 trillion CARES law. In total, lawmakers approved approximately $ 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. By comparison, the program distributed about $ 525 billion in forgivable loans to 5.2 million businesses over a period of about four months in 2020, saving about 50 million jobs, according to the SBA.
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However, with the recent changes to the program in terms of eligibility, some experts were concerned that there was not enough time to help small businesses that still need to access the fund. In a statement released 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.
Others, including the US Chamber of Commerce, have suggested the program should be extended throughout the year. A group of more than 100 professional organizations called on Congress to extend the program until at least June 30.
Under new rules announced by the Biden administration in late February, businesses with fewer than 20 employees were given an exclusive two-week deadline to apply for loans. Large businesses were left out of the program during this time, as part of an effort to ensure that the hardest hit businesses can get the help they need.
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The initial eligibility criteria resumed in mid-March; any business with fewer than 500 employees can apply for a first loan, and any business that has already received a PPP loan can apply for a second one if it employs fewer than 300 workers
Companies can choose to spend the funds over a period of eight to 24 weeks. At least 60% of the money must be spent to maintain the payroll in order to receive a full pardon.
The interest rate is always 1%.