President Joe Biden signed the Paycheck Protection Program (PPP) extension into law on March 30, extending federal aid for small businesses through May 31. The program was scheduled to expire on March 31.
The law also gives the Small Business Administration (SBA) the authority to continue to process loan applications through the end of June.
The President said in remarks at the bill signing at the White House. “Without somebody signing this bill today, there are hundreds of thousands of people who could lose their jobs, and small family businesses that might close forever.”
The PPP extension had bi-partisan support in Congress as many small businesses continue to feel the financial hardships resulting from the pandemic and related mandated closures and limited opening state and local government declarations.
Administration Made Changes Benefiting Small Businesses
In late February, the administration made several additional changes to the program, including a 14-day window where only businesses with fewer than 20 employees could apply and a revised loan formula to help get more money to sole proprietors, independent contractors and self-employed people, among other measures.
Early indicators suggest the changes are working. As of early March, Small Business Administration data shows average loans to minority-owned businesses were up 20% during the two-week exclusive window from the average over the previous 10 days, and loans to women owned businesses were up 14% and loans to small businesses in rural areas were up 12% over the same periods.
The most recent SBA data indicates that under the PPP, 8.2 million small-business loans totaling $718 billion have been issued so far. For all 2021 loans under the program, 78.4% are for $50,000 and under, and the average loan is $59,000. https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program/ppp-data#section-header-2
Small Businesses Advised to Apply as Soon as Possible
The AICPA and others have counseled that small businesses should apply for PPP funds as soon as possible because funds are likely to run out by mid-April.
By Mark Friedlich, Esq., CPA.