Since President Trump called for the SBA to increase SBA loan funding by $50 billion on March 11, small business lending has been swept up in the whirlwind that is the Paycheck Protection Program (PPP). If you’ve been watching from the sidelines as Congress, the SBA, lenders, and borrowers struggled to roll out the first round of the loans, you may be wondering if it’s finally time for your business to apply for a PPP loan. The time might be right if…
1. You Need the Money
If your business is one of the millions of small businesses negatively impacted by the COVID-19 pandemic, you may benefit from a PPP loan. True, it’s not a cure-all, but it is a resource, and at times like this, small businesses need all the help they can get.
2. You’ve Kept Employees on the Payroll
If you haven’t let anyone go since the pandemic began, then you’re already a prime candidate for loan forgiveness.
3. You Fit the Requirements
The limited PPP loan requirements have made PPP loans accessible to the vast majority of American small businesses. Yes, there are some cases where a PPP loan may not be the best solution for your business, but if you qualify, you may be one of the millions of small businesses that can benefit from a PPP loan.
4. The Second Round Is Going Smoother
You sat out the confusion of the first round of funding. Good news: the second round is going much smoother. In the first round, the SBA issued guidance the night before applications opened. Everyone was working around the clock to accept applications, process them, and disburse funds, with the SBA issuing guidance for the next steps along the way. Now that the dust has settled, PPP funding is running like a well-oiled machine.
5. Funds Are Being Disbursed Faster
Applications, decisions, closing, and disbursement are all happening at a more rapid pace during the second round, meaning the funds you need may be available faster than you know it.
6. More Lenders Are Funding
Toward the end of the first round of PPP loans, the SBA approved more financial technology (fintech) lenders. This move opened up the loans to borrowers that didn’t have a previously established relationship with an SBA lender. Plus, in the second round, some lenders who chose to sit the first one out have jumped in to fund businesses in need.
7. The Money Won’t Last Forever
While the second round of funding has lasted longer, thanks in part to some limits imposed by the SBA, the funds won’t last forever. With 30.2 million small businesses in the US, the truth is that the $760 billion allocated for PPP loans (between rounds 1 and 2 combined) won’t cover every small business in America—not even close.
8. There May Not Be a Round 3
The flip side of round 2 going slower than the first is that it’s looking less likely that Congress will approve a third tranche of funding. We can’t say for sure, but we wouldn’t recommend holding out hope for round 3.