The Act in its current form was signed into law by President Biden on Mar. 30, 2021.
If you are considering a 2nd Draw PPP Loan and thinking through the necessity certification, the SBA recently clarified FAQ 46, stating that Second Draw PPP Loan borrowers must certify, in good faith, that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” However, the FAQ further states that “because Second Draw PPP Loan borrowers must demonstrate that they had a 25% reduction in gross revenues, all Second Draw PPP Loan borrowers will be deemed to have made the required certification concerning the necessity of the loan in good faith.” Loan amounts received for First and Second Draw PPP Loans will not be aggregated.
On Tuesday, March 16, 2021, the U.S. House of Representatives voted to pass the Paycheck Protection Program (PPP) Extension Act, which would extend the deadline for businesses to apply for PPP loans until May 31, 2021. The PPP Extension Act would also give the Small Business Administration (SBA) until June 30, 2021, to process PPP applications.
The PPP was originally included as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. Two initial rounds of funding totaling $659 billion were made available to small businesses, and in December 2020, a third round of funding in the amount of $284 billion was provided through the Consolidated Appropriations Act (CAA) of 2021.
The PPP Extensions Act still requires support from the U.S. Senate and the President in order to become law. DHG will provide updates regarding the PPP Extensions Act as they develop. For more information, you can reach out to us at SBAQuestions@dhg.com.