Another Round of PPP Loans Available, and More are Coming
Paycheck Protection Program Loans, or PPP Loans, were a godsend all throughout the pandemic. Two rounds of PPP loans went out during 2020, and a third round was launched earlier this month. And this third round promises to alleviate some of the pratfalls the earlier rounds went through.
For many small business owners, applying for the first two rounds of PPP loans was an absolute nightmare. The process was overburdened with complexity and confusion, and that stress isn’t welcome when you’re worried about the safety and financial security of your employees. The fact that more than $3.6 billion went to ineligible borrowers compounds that frustration.
The third round of PPP loans, which started January 11th, are rolling out more slowly than previous waves, with a focus on ensuring they reach businesses, industries, and communities that were underserved previously.
The Biden Administration is working on more help for small businesses, too. President Biden’s Coronavirus Relief Plan would be the largest to date, with $1.9 trillion in funding. $15 billion would go toward small business grants, with another $35 billion going toward low interest loans and venture capital.
It’s far from a done deal, though, with both Republicans and Democrats raising objections. It may take some time to be finalized, and it may not end up being as big as planned. But hopefully small businesses can see another round of help coming in the near future.
How to Apply for a PPP Loan
The government doesn’t issue Payroll Protection Program loans directly. Instead, small businesses need to work with banks and other lenders to secure the funds. The Small Business Administration explains the process in more depth than we will, but here’s a brief rundown.
Your first step is to use the SBA’s free Lender Match tool. Lender Match connects you with suitable lenders and gets the process rolling. Just fill out their questionnaire, wait two days, chat with lenders, and then apply for your loan.
As a heads up, this process may not be easy. Some people navigate the system quickly, and others have a difficult time. But try to not get too frustrated. Take your time, research the process, and if you hit a roadblock, keep trying!
PPP loans have an interest rate of 1 percent, though qualifying businesses who meet employee retention criteria—they keep their staff in accordance with the SBA’s rules and the funds are used correctly—can have the full amount of their loan forgiven.
These loans do not require collateral or personal guarantees, and there aren’t any fees either. Companies need to meet the SBA’s size standards to qualify.
The deadline for applications is March 31st 2021, so it’s a good idea to get this process started immediately. If you need help, use the SBA’s numerous resources online and be sure to do some online research too. We hope you’re able to find a great lender and secure your PPP loan soon!
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