President Joe Biden on March 30 signed the “PPP Extension Act of 2021” into law, extending the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) loan application until May 31.
The initial PPP cutoff was set for March 31, but both chambers of Congress overwhelmingly passed legislation extending the program applications for two more months. Under the law, SBA also will have an additional 30 days to complete PPP applications that were pending after May 31.
SBA notes PPP now has been used by more than 8.2 million businesses since last year. Businesses can apply for PPP loans if they have 500 or fewer employees. The first draw of a PPP loan can go as high as $10 million, though the overall average loan is about $63,000 right now.
The big aspect of the PPP loan is that it is forgivable. SBA has already approved forgiveness on about 2.1 million loans, out of 5.2 million issued so far. About $186.1 billion in the loans have been forgiven.
PPP loans are forgivable as long as 60 percent or more of the proceeds are spent on approved expenses, which includes self-employment compensation for sole proprietorships and single-owner limited liability corporations (LLCs) that file income taxes based on a Schedule F.
Combined, “agriculture, forestry, fishing and hunting” have received $7.1 billion on 363,100 loans since the beginning of 2021, accounting for about 4 percent of the PPP loan volume. — Chris Clayton, DTN ag policy editor