The Senate voted this week to extend the paycheck protection program for two months, fearing the March 31 expiration of the small business bailout fund would leave struggling employers without a key economic lifeline.
Senators voted 92-7 to pass the PPP Extension Law of 2021, extending the program’s deadline to May 31 and giving the Small Business Administration (SBA) an additional 30 days after that to process requests in waiting.
President Biden has indicated he will sign the legislation, which will be sent to his office next week. The House of Representatives already passed the PPP Extension Law of 2021 last week on a bipartisan basis.
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Congress created the bailout fund, which provides government-guaranteed forgivable loans to small businesses if they maintain their payroll, a year ago with the passage of the $ 2.2 trillion CARES law. In total, lawmakers approved approximately $ 806 billion in funding for the program.
This year through March 7, the PPP approved 2.4 million loans worth about $ 165 billion, just over half of the $ 284 billion allocated to the program when it reopened in January. In comparison, the program distributed about $ 525 billion in forgivable loans to 5.2 million businesses over a period of about four months in 2020, saving about 50 million jobs, according to the report. SBA.
However, with the recent changes in program eligibility, some experts were concerned that they would not have enough time to help small businesses that still need to access the fund. In a statement earlier this month, the American Institute of Certified Public Accountants called the March 31 deadline “unrealistic” and urged Congress to extend it by at least 60 days.
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Others, including the US Chamber of Commerce, have suggested the program should be extended year round. A group of more than 100 professional organizations called on Congress to extend the program until at least June 30.
Under new rules announced by the Biden administration at the end of February, businesses with fewer than 20 employees were given an exclusive two-week period to apply for loans. Large businesses will be excluded from the program during this time, as part of an effort to ensure that the businesses most affected can receive the help they need.
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The original eligibility criteria resumed after the 14 days ended Tuesday: any business with fewer than 500 employees can apply for a first loan, and any business that has already received a PPP loan can apply for a second one if it employs fewer than 300 workers.
Companies can choose to spend the funds over any period between eight and 24 weeks. At least 60% of the money must be spent to maintain the payroll in order to receive full forgiveness.
The interest rate is always 1%.