President Biden provided a boost to small businesses by signing a law that gives a two-month extension of the Paycheck Protection Program on Tuesday. One day before the Coronavirus relief fund was set to expire.
Senators voted 92-to-7 to pass the PPP Extension Act of 2021 last week, extending the deadline and giving the Small Business Administration (SBA) an additional 30 days process pending applications. Businesses have until May 31 to apply for a forgivable loan on the condition they maintain payroll. At least 60% of the money must be spent on maintaining payroll in order to receive full forgiveness.
This was part of the $2.2 trillion CARES Act in which lawmakers have approved about $806 billion in funding for the program.
As of March 7, the PPP has 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. By comparison, the program distributed about $525 billion in forgivable loans to 5.2 million companies over the course of roughly four months in 2020, saving an estimated 50 million jobs, according to the SBA.
The U.S. Chamber of Commerce has suggested the program should be extended through the entire year, despite a group of more than 100 trade organizations calling on Congress to extend the program until at least June 30.