Save the Date: Your PPP Application Has a New Deadline
The Paycheck Protection Program (“PPP or the “Program”) has provided nearly 4 million loans in 2021 alone, totaling $220 billion in funding for business owners. The Program was set to expire, however, on March 31, 2021. Fortunately, after a flurry of congressional activity, the Program was extended one day before its expiration, until May 31, 2021. The extension not only provides an additional 60 days for small businesses to submit applications for PPP funds, but also provides additional time for the Small Business Administration (“SBA”) to process those lender applications. Under the terms of the extension, the SBA now has until June 30, 2021 to process PPP applications—good news for borrowers who may submit later in the cycle. While the extension did not include additional funding for the Program, SBA data as of this writing indicates that approximately $60 billion, of the appropriated $806 billion, remains up for grabs.
However, borrowers beware: this “two-month” extension is not quite two months, since May 31, 2021 is Memorial Day, borrowers will need to ensure applications are submitted by their lender on May 28—before the long weekend. It is also important to keep in mind that the SBA has not yet released an updated set of rules for the extended Program, so the application guidelines may change again soon. Sole proprietors and independent contractors may be particularly interested in the next round of SBA guidance, as some expect to see those sole proprietor borrowers who received a loan under the terms of prior rules—requiring their loan amount to be based on net profits—to be able to take advantage of the SBA’s guidance on March 3, 2021, which calculates loans for these borrowers based on gross profits. This new funding calculation, of course, provides for higher loan amounts for those borrowers.
Graydon’s multi-disciplinary team is ready to help your business tackle these, and other COVID-19 challenges. If you have questions about how your business could take advantage of these PPP updates, contact a Graydon attorney today.