Business Loans

The PPP Loan Program Has Been Extended For 2 Months

Mar 18, 2021 • 6 min read
Serious focused businesswoman typing on laptop and applying for loan
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      UPDATE: The PPP loan application period ended May 31, 2021. You may be eligible for the Employee Retention Credit. Apply today.

      The Paycheck Protection Program (PPP) loans have been one of the most successful government interventions to offset the economic calamity of COVID-19 on small businesses. These forgivable small business loans are credited with keeping more than 7 million US businesses afloat during the pandemic

      And the whole program almost came to an end. Inc. reported that the PPP loan application deadline was scheduled to end March 31, 2021. That would have meant your chance at the estimated $79 billion still available in the program would have expired unless you applied for a PPP loan before then.

      But bipartisan coalitions in Congress urgently passed last-minute measures to extend the PPP application deadline for 2 more months. CNBC reported that the House of Representatives passed the extension on March 16 by an overwhelming 415–3 vote. Then just 7 days before the program would have stopped taking applications, a 92–7 Senate majority approved that same extension of the PPP deadline to May 31. The bill will now go to President Joe Biden for his signature, and CNBC reports, “The White House has indicated its support for extending the program to support small businesses.”

      So the PPP application window looks likely to remain open for a couple more months, but this is no time to relax. More than 90% of the available PPP loan money has already been awarded, and the clock is ticking on how long your small business still has to apply for a PPP loan

      The PPP Loan Deadline Is Likely to Be May 31, 2021

      PPP loans are offered through the Small Business Association (SBA). And the SBA currently says on its website that “SBA is currently offering PPP loans until March 31, 2021.” That’s likely to change to May 31, 2021, if and when President Biden signs the PPP loan application deadline extension measure.

      To be clear, the money doesn’t run out at the deadline, and PPP loans will still be awarded. But this does mean the SBA and banks will no longer accept applications for PPP loans, which would effectively be the beginning of the end for PPP. 

      Inc. now reports that there’s still $79 billion in PPP loans still available, and the major banks are expected to start taking PPP loan applications again. The nation’s two largest lenders, JP Morgan Chase and Bank of America, both stopped accepting PPP loan applications in March. But both have said they plan to start accepting the loan applications again, and Wells Fargo just announced, “we plan to resume taking applications by early April.” 

      Of course, these banks’ ability to accept new applications is contingent on Biden signing the extension law. And small businesses are waiting on that with bated breath. 

      “They need the extension. That’s the most important thing that a business owner can get right now is because this round of PPP has been full of complications and complexities,” Lendio CEO Brock Blake told Yahoo Finance Live. “There are millions of business owners, in our estimation, that still are looking for that next round of PPP loan, haven’t secured it by now. And we absolutely believe that the deadline needs to be extended past March 31 to help those business owners get the capital they need.”

      Didn’t The Biden Relief Plan Add More PPP?

      The Biden administration’s COVID-19 relief package made some significant changes to the PPP program. Sole proprietors and independent contractors now enjoy new, relaxed rules that make them eligible for larger loans

      But that didn’t change the PPP loan deadline of March 31. In fact, Biden’s relief plan enacted last-minute changes that effectively paused the program for many businesses, right as the clock was running out.

      The Biden administration enacted a 14-day pause on PPP applications for any businesses with more than 20 employees as a way of lifting up and prioritizing truly small businesses. That “pause” period lasted from February 24–March 9 and has already ended.

      But the pause created confusion for lending institutions and held things up, bringing the loan program to a screeching halt within mere weeks of the March 31 application deadline.

      Will The PPP Loan Money Run Out?

      There is a new Second Draw PPP loan program that offers a lifeline to businesses that have already received one PPP loan, but that offer came so late in the program that it puts small businesses in a bind. In fact, the PPP loan money could run out within weeks.

      Inc. also reports that in Senate testimony, SBA associate administrator for the office of capital access Patrick Kelley “noted that the program could exhaust its funding as early as mid-April if application approvals continue at their current rate.” That means the PPP loan money might not even last until a new May 31 deadline.  

      There’s no way to know with certainty when major lending institutions will accept PPP loan applications again or how much longer the PPP funds will last. The surest route you can take is to apply for a PPP loan from an online lender ASAP, and check out our guide on the documents you need to ensure your loan application can be processed as smoothly as possible.

      About the author
      Joe Kukura

      Joe Kukura is a San Francisco freelance writer whose work also appears in SF Weekly and SFist. He’s written financial advice for NerdWallet, tech industry analysis for the Daily Dot, sports content for NBC Bay Area, and good, old-fashioned clickbait for Thrillist.

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