On March 25, by a vote of 92-7, the Senate voted to extend the PPP application deadline to May 31, relatively close to the original deadline of March 31, 2021. The American Rescue Plan Act extends eligibility for Paycheck Protection Program (PPP) loans to include additional nonprofits, referred to in the act as additional covered nonprofit entities. This new category of eligible organizations includes nonprofits listed under section 501(c) of the Internal Revenue Code but excludes 501(c)(3), 501(c)(4), 501(c)(6), and 501(c)(19) organizations.
Further criteria for eligibility require:
In addition, 501(c)(3), 501(c)(6), and 501(c)(19) nonprofit organizations are eligible to receive a PPP loan if they employ no more than 500 employees per physical location. This will allow some 501(c)(3) organizations that didn’t meet the original 500-employee requirement to apply for PPP funding under this newly updated eligibility criteria. For other nonprofits, the eligibility limit is 300 employees.
President Biden is expected to sign the bill into law, which will provide much anticipated relief for many lenders and borrowers concerned about meeting the original application deadline. We still recommend to any nonprofit organization that may now be eligible and would like to pursue PPP funds that they reach out to their lender as soon as possible.