The PPP Extension Act of 2021
On Thursday, March 25, 2021, the Senate passed a bill (“The PPP Extension Act of 2021”) extending the deadline for Paycheck Protection Program loan applications until May 31, 2021, or until the allocated funds run out. As of 3/21/2021, approximately $88 billion PPP funds remained available to the program. The Act also gives the SBA an additional 30 days beyond May 31 to process these loans, but no new PPP loan applications will be accepted during this 30-day window. The Act now goes to President Joe Biden for signature.
SBA Raises COVID-19 EIDL Loan Limit to $500,000
The U.S. Small Business Administration is increasing the maximum amount that small businesses and nonprofits can borrow under the COVID-19 Economic Injury Disaster Loans (EIDL) program. Starting the week of April 6, the loan limit for COVID-19 EIDL loans will jump from six months of economic injury with a maximum loan amount of $150,000 to up to 24 months of economic injury with a maximum loan amount of $500,000.
On March 12th, the SBA announced that it was extending deferment periods for all its disaster loans, including the COVID-19 EIDL loans. Thus, COVID-19 EIDL recipients won’t have to start making payments on their loans until 2022, though borrowers may voluntarily continue to make payments during the deferment as interest will continue to accrue on the outstanding loan balance.