The PPP Extension Act of 2021 extends the Paycheck Protection Program (PPP) application filing deadline from March 31, 2021, to May 31, 2021, thus providing potential PPP borrowers additional time to submit their applications.
The law also gives the SBA an additional 30 days — through June 30, 2021 — after the extended application deadline to complete its processing of applications. Previously, the loan amount was based on an applicant’s net profits, to the detriment of sole proprietors, independent contractors and self-employed individuals whose Schedule C tax forms didn’t show a net profit. The formula was revised to focus on gross profits — the amount of money earned before taxes or expenses are deducted. While welcome news for applicants, the revised formula required loan processors to make changes, leading to further delays and strain to keep up with demand. The extended processing deadline gives the SBA time to deal with its backlog of applications.
What the law doesn’t provide is any additional funding; however, $7.25 billion in additional funding was recently provided in the American Rescue Plan Act. The deadline extension may increase the odds of securing a loan, particularly for businesses that have struggled with the application process. However, according to Patrick Kelley, the associate administrator for the SBA’s office of capital access, the program could exhaust its funding as early as mid-April if application approvals continue at their current rate.
Please contact your DunlapSLK team member with any questions you may have regarding PPP and eligibility.