The legislation extends the deadline to apply for a PPP loan, which was previously set to expire on March 31, 2021, until May 31, 2021. The bill passed with bipartisan support in the U.S. House by a 415 to 3 margin and was approved 92 to 7 in the Senate.
In addition to providing two additional months for prospective borrowers to request funding, the law also gives the Small Business Administration (SBA) until June 30, 2021, to process PPP applications.
As of March 21, 2021, the SBA had distributed $718 billion of the $806 billion in funding available for PPP loans. Those distributions leave about $88 billion available for new First Draw PPP loans and Second Draw PPP Loans. As of March 18, 2021, the SBA had forgiven approximately $186 billion in PPP loans.
Two weeks prior to the PPP Extension Act becoming effective, the American Rescue Plan Act provided $15 billion in additional funding for the SBA’s Targeted Economic Injury Disaster Loan program. Earlier in March 2021, the SBA announced updated guidance on eligibility for the Paycheck Protection Program. This guidance intends to focus more aid on the smallest businesses.
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Author Patrick McKnight is an associate in the litigation department at Klehr Harrison.