Paycheck Protection Program Update – Week of April 5, 2021

UPDATE: The PPP loan application period ended May 31, 2021. Learn about financing options available for small businesses today at Lendio.com

 
There’s been a lot of great news in the last couple of weeks, from the extension of the Paycheck Protection Program (PPP) to an increased distribution effort of COVID-19 vaccines. Both are vital in getting small businesses back on their feet, but we may still take months to really feel the effects of both. Business owners are still struggling and need as much ongoing support as we can give them.

On the positive side, we know the latest round of the PPP began its rollout much slower than the first rounds did—but things are finally starting to pick up and we’re seeing applications across the board now getting approved and funded much faster. Here’s what’s changed in the few weeks:

• As of this writing, 74% of the $284 billion in PPP funds have been approved. 
• Congress passed legislation that will extend the application deadline to May 31, 2021. It will also give lenders until June 30 to fund PPP loans.
• Unfortunately, this round of the program has been plagued by fraudulent applications, and this has ramped up over the last few weeks. Fraud mitigation efforts have increased as a result and applicants are seeing slowdowns in processing.

The policy changes have largely, and wisely, been aimed at helping traditionally underserved business owners get equal access to relief funds. From what we’re seeing, fintech providers are making that a reality with loan sizes coming in around half that of the national average. Still, there are many business owners out there running into problems or getting stalled at specific stages, and we want to help.

What Business Owners Can Do to Keep Their Applications Moving Forward

If you’re one of the business owners with an application in the queue, rest assured there is still enough time left in the program to receive your funds. There are a few critical stages in the process where applications are getting held up. Here are the common problems and what you can do to keep your application moving forward to funding.

Unfinished Initial Application

You’ll want to ensure your PPP loan application is as complete as possible, right out of the gate. If you’ve already submitted an application, go back and ensure it is 100% complete. If at all possible, don’t leave anything blank, lenders have to prioritize applications that can automatically be identified as complete.

Additionally, be as realistic and specific as possible when completing your application. If you do go back into your application and make changes, you must re-sign the completed application.

Not Enough Documentation

Documentation is critical in this round. With each business entity comes different requirements, so be sure you provide the required documents for your business type. The more documentation you can provide, the better.

Each application must include a color copy of the front and back of a driver’s license or government-issued ID for each business owner who owns more than 20%. Additionally, include a valid voided check, complete business tax returns (ideally from 2019 and 2020), a complete and signed application, a document proving you were in business before Feb. 15, 2021, and a Feb. 2020 bank statement.

If you can, go above and beyond by providing any of the following to prove your business legitimacy: articles of incorporation, utility bill showing the address of the business, a Secretary of State filing, or EIN letter.

Didn’t Receive an SBA Number

If you don’t have an SBA number yet, it means that your application is likely incomplete. You need to provide all of the required documentation; the more you give, the better. If you have provided all of the documentation and still don’t have an SBA number, it is likely that your application has been declined by the SBA or is under review.

Received an SBA Number But No Contract

If you have an SBA number but no contract yet, your application is likely undergoing or did not pass a fraud review, document review, or a quality control review. To be proactive, provide any of the following: articles of incorporation, utility bill showing address, Secretary of State filing, EIN letter, or other government-issued documentation to prove your business is legitimate and you are the business owner.

Received a Contract But Not Funded Yet

If you have received and signed a contract, but it hasn’t been funded, there could be a few reasons. Your application may have errors on the contract, including the wrong name, wrong bank routing number, or incorrect bank account number. It’s also possible your application hasn’t passed the lender’s quality control review.

As Lendio and financial institutions across the country work to process these loans, we are asking applicants to proactively supply as much documentation as possible—it makes all the difference. We know how badly you and your employees need these relief funds, and we want to help you get funded as expeditiously as possible. 

Here are some additional helpful resources as you look for documentation requirements and updates:

Answers to Your Most Pressing PPP Loan Questions
New SBA Guidance Brings Changes for Independent Contractors and the Self-Employed

Now What? How to Track Finances After Filing for a PPP Loan

Yes, You Can Use a PPP Loan for Expenses Other Than Payroll

Disclaimer: The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice. All information, content, and materials available in this post are for general informational purposes only. Readers of this post should contact their attorney, business advisor, or tax advisor to obtain advice with respect to any particular matter.