(Washington, D.C.) — U.S. President Joe Biden today signed into law the PPP Extension Act of 2021—legislation introduced by U.S. Senate Committee on Small Business & Entrepreneurship Chair Ben Cardin (D-Md.) and U.S. Senators Susan Collins (R-Maine) and Jeanne Shaheen (D-N.H.) to extend the deadline for the Paycheck Protection Program to May 31. The bill also gives the U.S. Small Business Administration an additional month through June 30 to process any backlogged applications.
“PPP has supported millions of small businesses through the pandemic, and it is clear that the program must continue to be a lifeline for small businesses and nonprofits,” said Senator Cardin. “It is vital that we in Congress continue working in a bipartisan manner to fine-tune PPP in the weeks ahead to make the program more fair and equitable.”
“The PPP has been an enormous success, sustaining millions of small businesses and tens of millions of American jobs,” said Senator Collins. “To date, Maine small employers have received nearly 43,000 forgivable loans to help them stay afloat and continue to pay their employees, and our legislation will allow more small businesses to access this lifeline. I am pleased that Congress acted before the PPP expired in order to prevent an interruption in the program and give small business owners this crucial two-month extension. I encourage eligible small businesses that have yet to apply for a first or second draw PPP loan to contact their financial institution as soon as possible.”
“Millions of small businesses in communities across our country and more than 36,000 here in New Hampshire have kept their doors open thanks to the significant relief the Paycheck Protection Program provided over the past year, but with revenues still at unsustainable lows, many of these businesses are continuing to struggle and need further help,” said Senator Shaheen. “A new PPP loan can’t come soon enough for many of our hardest hit small businesses, and by extending access to this lifeline beyond the original March 31st deadline, my bipartisan legislation with Senators Collins and Cardin will help ensure more small businesses can access the help they need to stay afloat. I’m very pleased our bill cleared Congress with such strong support from both sides of the aisle and has been signed into law. I’ll keep working to secure additional resources Main Street needs to weather and recover from this crisis.”
The bill is co-sponsored by Senators Roger Marshall (R-Kan.), Dan Sullivan (R-Alaska), Jacky Rosen (D-Nev.), Lisa Murkowski (R-Alaska), Patrick Leahy (D-Vt.), Ron Wyden (D-Ore.), Thom Tillis (R-N.C.), Jon Ossoff (D-Ga.), Shelley Moore Capito (R-W.V.), Jeff Merkley (D-Ore.), Martin Heinrich (D-N.M.), Rob Portman (R-Ohio), Amy Klobuchar (D-Minn.), and Joe Manchin (D-W.V.).
Representatives Nydia M. Velázquez (D-N.Y.), Blaine Luetkemeyer (R-Mo.), Carolyn Bourdeaux (D-Ga.), and Young Kim (D-Calif.) introduced the bill in the House. The bill was endorsed by nearly 100 organizations, including the National Federation of Independent Businesses and the U.S. Chamber of Commerce.
Senators Cardin, Collins and Shaheen, along with Senator Marco Rubio (R-Fla.), authored the Paycheck Protection Program, which became law as part of the CARES Act last year. In 2020, more than five million small employers received forgivable PPP loans. The four architects of the PPP successfully advocated for the inclusion of $284.5 billion in the December COVID-19 relief package to reopen the program. According to the latest data from SBA, more than 3.5 million PPP loans have been approved in 2021 totaling nearly $212 billion.
Under the December law, small businesses that employ 300 or fewer people and that experienced a 25 percent or greater gross revenue loss between comparable periods in 2019 and 2020 due to COVID-19 are eligible to apply for a second forgivable PPP loan. In addition, forgivable overhead expenses are expanded to include supplier costs and investments in facility modifications and personal protective equipment needed to operate safely. In recognition of the severe impact that COVID-19 mitigation measures have had on the hospitality sector, in particular, the formula used to calculate the maximum forgivable loan amounts for second draw loans is enhanced for restaurants and hotels to equal 3.5x average monthly payroll. Further, small business owners that did not receive a PPP loan in the first round are also eligible to apply.