
Managing Money In A Crisis
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The SBA is only accepting PPP loan applications from businesses with fewer than 20 employees between February 24 and March 10, 2021. Applications will be available to all small businesses after this time, until March 31, 2021.
The Paycheck Protection Program (PPP) is less complicated compared to other loans backed by the Small Business Administration (SBA). There are fewer requirements, lenders process and fund the loans on their own, and it’s more widely available.
The second round of stimulus funding expanded the types of expenses that are eligible for forgiveness and allows 501(c)(6) organizations that aren't involved in lobbying to qualify for a loan.
Businesses that spend funds on newly eligible expenses like personal protective equipment and renovations to meet health guidelines can apply to receive more funds through the PPP. And eligible businesses that haven't already received a PPP loan can also apply for financing.
Yes, the SBA reopened PPP applications on January 11, 2021 through CDFIs and has plans to roll out the loans to other providers in the near future. Applications will remain open until March 31, 2021 — unless Congress renews the program again.
If you can't apply through a CDFI and need financing now, compare other loans for businesses affected by the coronavirus or see if your business qualifies for a COVID-19 grant. You can also explore these alternatives to SBA loans to help increase cash flow.
Make sure you have the most up-to-date application by checking the date at the top of the form. The most recent version was revised on January 8, 2021. If you're applying through a lender's application, check in to make sure they're also using the most recent version. Otherwise, not all businesses will qualify
Review the requirements for the PPP to make sure your business makes the cut. At a minimum, your business must meet the following criteria:
Owners with a 20% stake in the company or more must be US citizens or permanent residents and current on all federal loans. And as of June 8, the government revised the look-back period for felony criminal histories. Now, you can qualify for a PPP loan if you haven’t been convicted of a non-financial felony in the last year — reduced from the last five years.
There’s a chance some lenders might have additional requirements, but they likely won’t be as strict as a typical SBA loan.
Most small business lenders are offering PPP loans. Since rates, terms and loan amounts are the same regardless of the lender you use, consider factors like additional eligibility requirements, documentation required and potential turnaround times.
While you can find a PPP loan with non-SBA lenders, you’ll likely hit less snags with a lender that has experience working with government-backed business loans. The SBA also released a new Lender Match tool on its website that can help you find a lender to apply for a PPP loan through.
Here’s a list of online lenders that are offering PPP financing again. Keep in mind that these lenders don’t offer SBA disaster loans — you’ll need to apply for those directly on the Small Business Administration’s disaster website.
If you don’t see an application on the lender’s website, call customer service to find out how to apply and what documents you need to upload. At a minimum, you’ll likely need to provide verification of payroll costs — such as a W-2 — as well as 1099 forms and utility bills.
If your business has more than one owner with at least a 20% stake in the company, come up with a plan so you can each fill out the appropriate sections of the application.
3 lenders share tips for filling out the PPP application
The SBA requires all lenders to use the same information for PPP loans, though the format might change. These steps show you how to. It’s only two pages long and is less complicated than most SBA loan applications.
Once you have the form handy with you, follow these steps to apply:
Complete the box at the top of the application with the following information:
Complete the second box with the following information:
If you’re self-employed, check out our specialized guide.
Otherwise, Enter the average amount your business spent on eligible payroll costs in 2019 or 2020. You can use our in-depth guide to calculating your loan amount to better navigate this step.
Multiply your average monthly payroll by 2.5 and write the amount next to the dollar sign — if you don’t have an Economic Injury Disaster Loan (EDL) and move on to the number of jobs. If it’s higher than $10 million, write $10 million — that’s the maximum you can borrow.
Subtract any EIDL advance — if applicable — you’ve received from the balance of any EIDL loan that you’re using to cover payroll expenses. Then add the result to the number you calculated in the previous step and enter it next to the dollar sign.
Write in the number of full-time, part-time and other employees you have on payroll. Don’t include independent contractors.
Select all costs you intend to cover with this loan:
If you plan on using it for other costs, check Other and write in an explanation.
Under the box labeled Applicant Ownership, fill in the following information for everyone with at least a 20% stake in the company. If your business is owned by a trust, provide information for the trustor.
If there are more than two owners, attach a separate sheet with their information.
Check Yes or No for each question in this section. If you answer Yes to the first two questions, you aren’t eligible for this loan.
Like with the previous section, all owners must complete this final section separately. Each owner must read through the representations and authorizations and write their initial next to each certification.
Review the application for inaccuracies, and make sure each owner signs, dates and writes their title on their part of the application. Then, send the application to the person who is the business’s main representative to sign, date and write their title on each application form.
Follow your lender’s directions for submitting the application form, along with any required documents.
Application processing times vary depending on the lender and the volume of applicants. It may take as little as one day or as long as a few weeks to get a response.
8 business owners dish their SBA coronavirus loan stories
If you’re approved, your lender will typically send the funds to your business’s bank account by ACH transfer. This can take between one to three businesses to process. If you’re borrowing from a lender where you already have an account, you may be able to get your money the same day you’re approved.
Twenty-four weeks after the funds are disbursed, you can apply for forgiveness.
How the Paycheck Protection Loan program works
Make the most of your Paycheck Protection Loan by taking these steps:
Want to learn about other options? Read our guide to business loans during the coronavirus to find out what else is available to you.
Commonly asked questions about the First Draw PPP loan application.
Businesses that shut down during the crisis can still qualify as long as they were established before February 15, 2020.
No, in fact you can refinance an Economic Injury Disaster Loan (EIDL) with a Paycheck Protection Program loan. If you already have an EIDL and want to refinance, ask your lender about adding the balance to your loan amount before it issues your PPP loan.
Funding for the EIDL advance ran out on July 11, 2020. However, a new round of funding is in the works with the passing of the Economic Aid Act in late December 2020.
Not quite. Read our guide to applying for a Second Draw PPP loan to get a step-by-step look at the new application.
Here’s where to get financial help for yourself and your business if you’ve been affected by the storm in February 2021.
The White House announced new changes to PPP loans, helping the smallest businesses and opening access to people with student loan defaults or nonfraudulent felony convictions.
Small lenders continue to offer a lifeline to small businesses for First and Second Draw loans.
Find out how to apply — plus explore alternatives to deferring your payments.
Compare 6 lenders to find one that’s a good fit for your needs.
All lenders are now accepting First Draw and Second Draw loans until March 31st. Here are tips for how to pick a PPP lender.
Lenders with less than $1 billion can submit applications to this COVID-19 assistance program before it fully reopens Tuesday.
The PPP wasn’t made with sole proprietors and independent contractors in mind. Here are other options that can help.
Some PPP borrowers can get another round of funding through community lenders — though not all can qualify.
You only have until the end of March to get your next application in.