On Tuesday, March 30, 2021, the Paycheck Protection Program (PPP) application deadline was officially extended from March 31, 2021 until May 31, 2021 via President Biden’s signing of the PPP Extension Act of 2021 (H.R. 1799). The additional 60 days provided should afford businesses the opportunity to file new applications for a First or Second Draw PPP loan or complete an existing application, and the law also extends authorization of loans to June 30, 2021 to give the Small Business Administration additional time to process applications. Based on testimony given during the passing of the legislation, the PPP should be funded through mid-April based on the current rate of lending.
Applying for Forgiveness
As a reminder, PPP borrowers should keep the following in mind:
- A borrower with a PPP loan of $150,000 or less may submit Form 3508S to apply for loan forgiveness. This streamlined application requires only a one-page certification.
- Generally, a borrower may submit a loan forgiveness application any time on or before the loan maturity date if the borrower has utilized all the loan proceeds for which the borrower is requesting forgiveness.
- A borrower applying for forgiveness of a Second Draw PPP loan of more than $150,000 must submit the loan forgiveness application for their First Draw PPP Loan before or simultaneously with the loan forgiveness application for the Second Draw PPP loan.
- If a borrower does not apply for loan forgiveness within 10 months after the last day of the maximum covered period of 24 weeks, the PPP loan is no longer deferred and the borrower must begin paying principal and interest. Assuming the borrower applies for (and is granted) forgiveness, any principal and interest payments should be refunded back to the borrower.
We will continue to monitor developments related to the Paycheck Protection Program and communicate any significant changes that will impact our clients. For more information about PPP loan eligibility or application and forgiveness requirements, please contact your Bennett Thrasher tax advisor by calling 770.396.2200.