When does the PPP program end? DEADLINE EXTENDED TO MAY 31, 2021!

In this 2-minute read:

  • The deadline for PPP loan applications HAS BEEN EXTENDED to MAY 31, 2021
  • Important updates have made it easier to meet full loan forgiveness
  • Extensions on payroll and rehiring deadlines, and EXCEPTIONS for 2021

IMPORTANT UPDATE FOR 2021: Congress approved an extension of the PPP loan program until May 31, 2021, including “second draw” PPP loans for businesses that received PPP funding in 2020.

The PPP loan program as part of the CARES Act of 2020 was designed to provide emergency loans for America’s small businesses in crisis due to the coronavirus pandemic.

The initial PPP funding ran out, but the PPP program was re-funded for a second round of loan capital. The original application deadline for PPP loan applications was EXTENDED to MAY 31, 2021. 

President Biden signed the PPP Extension Act of 2021 on March 30. This bill extended the PPP application window until the end of May, after which the SBA will not accept any new PPP applications, but only process those applications it has already received from lenders. However, the PPP program may be renewed, depending on America’s needs.

On June 5, 2020, President Trump signed into law new updates to PPP loan forgiveness requirements, extending the covered period to 24 weeks, reducing the minimum loan funding that must be spent on payroll to 60%, and easing the requirements for maintaining staffing and compensation levels. Please read the details here.

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It doesn’t cost anything to apply for a PPP loan

By law, it’s free for borrowers to apply for PPP loans. You should not be charged anything by your lender or loan facilitator to complete or submit your PPP loan.

If your local SBA-approved lender is no longer accepting applications, you can apply for free via Womply

Many larger banks stopped accepting PPP loan applications due to the new rules establishing a maximum amount of capital per PPP lender or for other reasons, but you can still apply elsewhere if the program is open. 

100% PPP loan forgiveness is now easier to achieve

The new Paycheck Protection Program Flexibility Act, signed into law on June 5, 2020, has lowered the minimum amount of PPP funds that must be spent on payroll to meet full forgiveness from 75% to 60%, extended the loan repayment deferment period, extended the deadlines for rehiring or repairing payroll cuts, and other important changes. Read more here.

For 2021, additional updates have made it even easier to get forgiveness for loans less than $50,000 and for businesses without employees. See details: What’s changed for 2021 in the PPP loan process?

IMPORTANT PPP FORGIVENESS UPDATE AS OF AUGUST, 2021: On July 28, 2021, the SBA announced big news (for most PPP borrowers). The SBA has established an online PPP forgiveness platform called the SBA PPP Direct Forgiveness Portal. If your PPP loan was for $150,000 or less, AND if your lender has opted-in to the use of the platform, you will be able to submit your PPP loan forgiveness application online directly to the SBA, using the electronic equivalent of SBA Form 3508S. For full details, read our post about the new SBA PPP Direct Forgiveness Portal and other recent rule changes.

For 2021 there are certain exceptions to the “maintaining employees levels and compensation” rule for PPP forgiveness

If you received a PPP loan of $50,000 or less

If you received a PPP loan that was $50,000 or less, you are exempt from having to maintain your employee and compensation levels in order to receive loan forgiveness. Your loan must still be spent on approved costs and you will still need to document that you spent at least 60% of your funds on payroll expenses.

An employee quit, retired, or was fired (with just cause), or refused your offer to be rehired

If your loan amount is greater than the $50,000 loan threshold and you have employees, but you couldn’t maintain employee levels due to someone quitting or being fired with just cause, then you can still qualify for full loan forgiveness. You can also get full loan forgiveness if you have written proof that you offered to rehire employees, but they refused your offer (if your offer was at their former pay). But, it’s very important that you document each of these instances so that you can verify this when you apply for loan forgiveness.

You’ll need documentation to explain why your employee was fired or other supporting documents to verify an employee’s termination or their refusal to be rehired.

Do I still need to restore payroll or headcount to previous levels in order to receive forgiveness if I get first PPP Loan after December 27, 2020?

No. PPP Loans received after December 27th, 2020 are not required to “rehire” any employees in order to receive forgiveness. You will, however, need to maintain current payroll levels during the forgiveness period. (Exceptions to this would include employees who resign or are terminated with cause).

If you’ve kept those requirements for the 8 (or 24) weeks after you received your PPP loan, at that point you may apply for loan forgiveness through the lender that serviced your loan.

In order to request any amount of forgiveness on your loan, you will need to verify that your loan was used for the required expenses, which means you’ll need documented proof.

Pros and cons of getting a PPP loan

It can be a hassle to get your PPP loan approved, depending on your loan facilitator or lender. And you do have to apply for forgiveness, but if you do, and you use the funding as intended, you don’t have to pay back your PPP loan… ever! Read more pros and cons of PPP loans here.

Helpful FAQs and articles about PPP loans

Here are some more articles and FAQs to help you learn more about PPP loans:

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