Thousands of small businesses struggling to stay afloat because of the pandemic are getting extra time to apply for forgivable, low-interest loans.
The Senate voted overwhelmingly to extend the deadline of the Small Business Administration’s Paycheck Protection Program to May 31, and. President Joe Biden is expected to sign it imminently. The popular Small Business Administration program was scheduled to end Wednesday, a timeline that could have prevented some 190,000 small businesses who have pending PPP applications from securing a loan.
But don’t wait until the last minute to apply. The extension bill does not include additional funding. While the SBA says $79 billion is still available to lend, that may only meet demand through mid- to late-April, well short of the May 31 application deadline in the new extension. It’s unclear whether that will prompt lawmakers to consider appropriating more money. As of now, lawmakers have not appropriated more money to the program.
Shuttered Venue grants, EIDL changes
The news comes as the SBA continues work o the upcoming rollout of its $28.6 billion Restaurant Revitalization Fund, which aims to provide cash grants of up to $10 million for restaurants. The agency said it will start accepting applications for its Shuttered Venue Operators Grant Program April 8. Learn more about the program here.
The SBA also said it was more than tripling the maximum size of its Economic Injury Disaster Loans, from six months’ worth of economic injury — or up to a maximum of $150,000 — to 24 months of economic injury with a maximum loan amount of $500,000. The official increase will begin April 6, the agency said.
The SBA also announced that it will extend deferment periods for all disaster loans, including the COVID-19 Economic Injury Disaster Loan (EIDL) program until 2022.
All SBA disaster loans made in calendar year 2020, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 24-months from the date of the note. All SBA disaster loans made in calendar year 2021, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 18-months from the date of the note. It is important to note that the interest will continue to accrue on the outstanding balance of the loan throughout the duration of the deferment.