The CARES Act established the Paycheck Protection Program (PPP) last year. It permits the Small Business Administration to provide loans to qualified businesses affected by the COVID-19 pandemic. The 100% federally guaranteed loans must be used for payroll and certain non-payroll costs.
Then late in 2020, the Consolidated Appropriations Act (CAA) authorized additional funding to the program and extended it until March 31, 2021. This law also expanded access to “First Draw” PPP Loans to other entities, expanded additional eligible expenses, clarified terms, and authorized “Second Draw” PPP Loans for smaller borrowers.
The American Rescue Plan Act (ARPA), which was enacted on March 11, 2021, provided an additional $7.25 billion in funding, but didn’t extend the expiration date of the program. It also made some modifications to the PPP.
The New Law
Under the new law, new loan applications submitted through May 31, 2021, will be eligible for consideration. Between June 1, 2021 and June 30, 2021, the SBA won’t accept new lender applications, and will only process those applications received before June 1, 2021.
Contact us with questions about the PPP or for assistance in applying for a loan or receiving loan forgiveness.
Any accounting, business, or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough analysis of specific issues, nor a substitute for a formal opinion, nor was it written to be used to avoid tax related penalties.