Congress has approved the PPP Extension Act of 2021, which pushes back the Paycheck Protection Program – PPP – loan application deadline by an additional two months, from March 31 deadline to May 31. This means those businesses most affected by the pandemic are allowed to apply for a loan beyond this month.
In addition to having more time to complete the application for a first-draw or second-draw loan, this also gives the Small Business Administration more time – now until June 30 – to process loans, a move advocates say was needed to tackle the existing backlog of applications. To this point, it is noteworthy that 60 additional days were needed to clear the backlog of pending PPP applications halted by SBA coding errors.
The extension garnered support from banking and other groups involved in the PPP loan process. The 60-day extension provides necessary additional time for both applicants and lenders to review and submit the applications. Moreover, pushing back the PPP application deadline is also helpful to those businesses that are still in the process of applying, giving them a better chance of securing a loan.
Since its inception in March 2020, more than 7.8 million PPP loans have been approved totaling nearly $704 billion in aid. As of March 17, there is about $103 billion left in unclaimed PPP funds. As we all know, the first round of PPP draws had neither specific guidelines nor strict vetting in place, allowing bigger banks and bigger companies to grab most of the initial funds, the program has allotted more money and continued to adapt the rules and guidance in an effort to make funds more available to both the smallest businesses and underrepresented groups.