Washington, D.C.—Today, U.S. Senators Susan Collins (R-ME), Ben Cardin (D-MD), and Jeanne Shaheen (D-NH) introduced the PPP Extension Act of 2021. The bipartisan bill would help small employers retain access to forgivable Paycheck Protection Program (PPP) loans by extending the deadline for PPP applications for another two months to May 31, 2021, and then providing an additional 30-day period for the SBA to process applications that are still pending.
The legislation sponsored by Senators Collins, Cardin, and Shaheen mirrors the bipartisan agreement reached by the leaders of the House Small Business Committee. The House companion bill was introduced by Representatives Nydia M. Velázquez (NY-07), Blaine Luetkemeyer (MO-03), Carolyn Bourdeaux (GA-07), and Young Kim (CA-39).
“I have heard from countless small employers about the impact the PPP has had on them and their employees,” said Senator Collins. “With the ongoing distribution of COVID-19 vaccines, there is a light at the end of the tunnel, but we’re not there yet. That is why we need to extend the deadline for the PPP now. By extending the PPP, our bill would help our nation’s small employers retain access to forgivable PPP loans.”
“It’s clear that the most vulnerable small businesses will need help beyond March 31, so we must pass this extension as quickly as possible,” said Senator Cardin, Chair of the Senate Small Business and Entrepreneurship Committee. “This commonsense, bipartisan bill will meet the continued demand for PPP loans by giving small businesses two more months to apply, and giving SBA an additional month to process the loan applications by June 30.”
“With businesses in New Hampshire and across the nation struggling to keep workers paid and facing permanent closure, expanding access to robust assistance for these mom and pop shops is essential,” said Senator Shaheen. “As one of the original creators of the Paycheck Protection Program last year, I was disappointed that despite our efforts, the American Rescue Plan unfortunately did not include an extension of these loans. I’m pleased to build on the bipartisan work that Senators Collins, Cardin and I started last year when we established the Paycheck Protection Program by taking this common-sense step to extend the deadline for PPP loans. Congress must act to preserve this lifeline for small businesses trying to stay afloat.”
Senators Collins, Cardin and Shaheen, along with Senator Marco Rubio (R-FL), 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, helping to sustain more than 50 million jobs.
The four architects of the PPP successfully advocated for the inclusion of $284.5 in the December COVID-19 relief package to reopen the program. Financial institutions are currently able to accept and process PPP applications through March 31, 2021. According to the latest data from SBA, 2.4 million PPP loans have been approved totaling approximately $165 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.