A bill to move the Paycheck Protection Program (PPP) application deadline from March 31 to May 31 won approval in the U.S. Senate on Thursday, March 25, 2021. As it stands, the votes Thursday send the legislation to President Joe Biden for his signature several days before the PPP was set to expire.
The additional 60 days provided by the bill will greatly help small businesses, nonprofits, and the CPAs that serve them complete existing PPP loan applications and file new ones. The extension act also provides the SBA time to address significant loan application process challenges, including confusing validation and error codes, delayed guidance, and changes to the PPP loan amount calculation for self-employed borrowers.
Patrick Kelley, an associate administrator for the SBA’s Office of Capital Access, testified during a Senate Small Business Committee meeting Wednesday that 190,000 applications were still held up in the SBA’s PPP platform due to unresolved error codes related to validation checks instituted by the SBA to help prevent fraudulent applications from being funded.
The PPP Extension Act does not provide any additional funding for the current round of the PPP, which Congress provided with more than $290 billion to make forgivable loans to small businesses and nonprofits. From the program’s opening on Jan. 11 through March 21, the SBA has approved more than 3.1 million loans totaling nearly $196 billion. In his testimony Wednesday, Kelley said that at the current lending rate, the PPP should have enough funding to last through mid-April.
As always, we will closely monitor federal and state legislative changes to help our clients effectively navigate these changes. If you have questions about how this extension affects your situation, please reach out to your Whitinger advisor.