Fundbox coronavirus series, pt. 4, PPP Loans
Although the first round of relief funding from the Paycheck Protection Program (PPP) ran dry before many small businesses could even find an SBA-approved lender, a new law went into effect on April 27th that includes more than $310 billion for the Paycheck Protection Program. Nearly $60 billion of the additional PPP funding has been set aside for businesses that do not have established banking relationships, including rural and minority-owned companies.
The U.S. Chamber of Commerce suggests again invites small businesses to connect with a lender and apply for the PPP loan. Time is of the essences, because as during the first round of funding, these newly available funds will be disbursed on a first-come/first-served basis.
Finding a PPP Lender
Because the SBA and lenders now know more money will be coming, it’s a good idea to be ready as soon as the government gives the green light. Experts believe the new infusion of funds will go fast—as quickly as the first 48 hours.
If your business bank is not an approved SBA lender, you need to find a lender now. You can find a list of approved lenders on the sba.gov website by state or Fundbox can connect you to a lender and guide you through the process.
Applying for a PPP Loan
Next, gather the correct documentation for the application. Here is a list of the required PPP application documents:
- Basic information about your business and how to contact you
2. Average monthly payroll costs
3. Details of full-time employees and their payroll costs
4. Applicable Tax Forms (for 2019 and Q1 2020, if available)
5. Proof of mortgage or rent, mortgage interest, and utility expenses
6. Articles of Incorporation/Organization
7. Applicable forms to verify all ownership over 20%
8. Each owner’s TIN, EIN, or SSN and copies of IDs for all 20%+ owners
9. Email addresses for all 20%+ owners of the business
10. Proof of Active and Good Standing status of the business
11. The completed SBA PPP application form
12. Electronic funds transfer information
How to Learn More About the PPP Application
For more details on how to complete the PPP loan application and how to find the required documents, please this complete PPP Checklist. For a description of the loan terms for the PPP, the SBA provides a summary here.
Fintech Companies Joining the Process
The SBA has been slow to include fintech companies as approved lenders, which was not helpful to smaller businesses, especially as some major banks have been accused of favoring their larger clients. Once the SBA finally gave a few fintech companies approval, the first round of funding ran out. However, now that additional PPP funding has been passed by Congress, it’s essential to get started now, and a fintech firm may be able to help you apply and connect you with a PPP partner bank.
Once the lender approves your application, it gets sent to the SBA for approval and then it’s time to cross your fingers and hope you get approved before the next round of funding is exhausted. If you are lucky enough to get approved, you will get notification (usually by email) to sign final agreements and then payment comes in about five to seven days.
Disclaimer: This information has been aggregated from external sources. Fundbox and its affiliates do not provide financial, legal or accounting advice. This content has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. You should consult your own financial, legal or accounting advisors before engaging in any transaction.