Congress Extends PPP Loan Deadline Five Weeks

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The House of Representatives agreed yesterday to extend applications for Paycheck Protection Program (PPP) loans until August 8. The Senate, in an unexpected bipartisan vote, had passed the extension on Tuesday night, hours before the June 30 deadline to apply for the loans would have expired. The measure now goes to the White House, where President Trump is expected to sign it.

 

The $650 billion loan program was part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a COVID-19 pandemic relief measure enacted on March 27. PPP would have shuttered on Tuesday with more than $130 billion still unspent. The new legislation is intended to provide small businesses with more time to apply for the funds remaining in the program.

 

PPP provides loans of up to $10 million to small business. The loans may be forgiven if spent on qualified payroll and other select business costs (see LMC Alert). The original $330 billion program enacted in the CARES Act was quickly paid out, prompting Congress to inject an additional $320 billion in April. In June, lawmakers cleared a series of measures to relax the terms of the loan (see LMC Alert).

 

After yesterday's vote, House Speaker Nancy Pelosi (D-CA) urged the Senate to further extend the program through December. However, congressional action on this or other relief measures, including a proposed extension of enhanced employment benefits scheduled to expire on July 31, will have to wait at least two weeks until Congress returns from its Fourth of July recess.

 

During this crisis, your LMC professional is available if you have questions related to the latest updates on this topic.  All our prior Alerts are available on the Updates page of our website.

 

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