It’s been a big week for COVID-19 relief loan programs.

PPP Loan: Proposed Application Deadline Extension

Amidst the nonstop news of tax code changes, overhaul reforms, and deadline extensions, Congress has thrown another proposal into the ring: extending the PPP application deadline two months to May 31, 2021.

Currently, the loan is set to expire on March 31, but after pleas from the AICPA and other accounting organizations, a bipartisan group of Senators has proposed the PPP Extension Act of 2021, which would allow more time to complete the SBA’s convoluted loan application.

The AICPA and Journal of Accountancy have noted flaws in the PPP application process including validation errors, confusing hold codes, false error codes, and lengthy resolution periods for such faults. “Delayed SBA guidance and new forms enacting changes in the maximum loan amount for small business owners… coupled with lenders’ need to update their systems,” said the Journal of Accountancy in a news statement, “[have resulted in] inequitable treatment of many borrowers.”

The PPP budget recently received a $7.25 billion boost after the passing of Biden’s American Rescue Plan last week.

EIDL: Extended Repayment Due Date

The SBA announced last Friday that payments on all disaster loans received in 2020 and 2021 have been deferred to 2022.

Originally, borrowers had a 12-month period to commence repayment. Now, for EIDLs made in 2020, the first payment will be due 24 months after the date of the note. For EIDLs made in 2021, borrowers will have 18 months from the date of the note to begin payments. Principal and interest payments for existing disaster loans have also been deferred for 12 months.

However, this is not an interest freeze. Borrowers may wish to continue payments as interest will continue to accrue despite the delayed repayment due date.

Stay up to date on all COVID-19 news by visiting our COVID-19 Information Center and calling our office at 516-541-6549 to speak with a member of our Coronavirus Response Team

Devin McQuillan
Associate, Creative Solutions

Contact:
516-541-6549 | Email

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