Prepare your business for significant dates surrounding Paycheck Protection loan applications, Shuttered Venues Operator Grants and Restaurant Revitalization Fund Grants to determine the most effective course of action for you and your business.
PPP Application Extended
As expected, the Senate has joined the House in voting to extend the deadline for Paycheck Protection Program (“PPP”) Loan applications from March 31 to May 31, 2021. The bill also gives the SBA an additional 30 days to finish processing any applications received by May 31. It does not; however, add any additional funding to the program.
Why is this significant?
- Given the revenue reduction eligibility criterion in the Second Draw PPP (“PPP2”) program, as well as more stringent fraud and other validation checks, the SBA is running a significant backlog in processing loan applications.
- Borrowers who were previously excluded from PPP and became eligible because of the changes in the law last December may have just received their First Draw PPP (“PPP1”) loans. In order to qualify for PPP2, they have to spend those funds on eligible expenses first and may not have had enough time to do so by March 31.
- As a result of the expansion of the Employee Retention Credit (“ERC”) and the fact that businesses are now eligible for both PPP and ERC, borrowers are still trying to decide how to maximize their benefits under both programs.
Shuttered Venues Operator Grants (“SVOG”)
The SBA announced that it expects the SVOG applications to go live on April 8, 2021. In the meantime, those who believe they are eligible should sign up at the application portal to get SBA updates. Also, those interested in the program should attend the SBA webinar on March 30, from 2:30 to 4 PM (register here).
Restaurant Revitalization Fund Grants (“RRFG”)
The SBA expects to start releasing information about the RRFG program between April 1 and April 5. After that, it expects to do a pilot phase of the program with applications going live 30 to 45 days later. So, struggling restaurants and other eligible foodservice providers can expect that they won’t see the benefits of this program until about mid-May.
As always, we will keep you updated of new developments and changes to these timelines. In the meantime, please contact your Friedman LLP advisor with any questions.