Is It Too Late To Apply For a PPP Loan?


The Small Business Administration recently updated and expanded the Paycheck Protection Program loan guidelines. The new deadline to apply is Aug. 8, though lawmakers are negotiating a new relief package, so this is subject to change. The House and Senate have proposed extending the PPP through the end of 2020, but nothing is confirmed yet.

“Right now the deadline is Aug. 8, but you don’t want to wait until then to submit your application,” says Ken Alozie, managing director at Greenwood Capital Advisors and certified SCORE mentor with the SBA. Some lenders will stop taking applications in advance of the deadline, so if you haven’t applied yet, so the sooner you apply, the better.

Here are three ways you can make the most of your application.

Prepare for a Better Application

Although the PPP has always been available to smaller, individually owned and operated businesses, it was hard for these businesses to complete the original application process. “When it initially rolled out, there was difficulty for smaller firms navigating the process,” Alozie says. Lenders initially asked for payroll forms, Alozie says, which made the application complicated for sole proprietors and single-member LLCs who may not pay a traditional payroll. 

The new application is much simpler and more accessible to smaller businesses. “Now they are able to submit Schedule C forms and other documentation in place of 941 payroll forms,” Alozie continues. This change in the second round of PPP loans makes it easier for smaller businesses to receive attention from lenders.

Understand the Updated Forgiveness Process

Under the original PPP guidelines, at least 75% of the loan amount had to be put towards payroll over an eight-week period. But in round two this has changed. “Now only 60% of funds have to go towards payroll,” Alozie says. “That requirement has become less stringent.” The rest of the funds, as before, can be put towards interest on your mortgage payment, rent or utilities.

The forgiveness coverage period has changed, too, Alozie notes. “It’s gone from eight to 24 weeks,” he says. “You can now incorporate more payroll and other expenses when you’re submitting your application.” From the end of that 24-week period, you will have 10 months to submit your application for full loan forgiveness, or at that point, your principal and interest payments will kick in.

Lean On Your Community Resources

Start your PPP loan application with a local participating lender. Use your current lender, if possible. “Ideally your starting point will be your current bank, where you have your business bank account or business loan,” Alozie says. The lender should function as your partner throughout the process, and a pre-existing relationship helps strengthen that bond. Alozie recommends having a point of contact at the bank who knows you and who you can reach out to with questions or concerns.

Sign up for webinars or conference calls through both your local lender and the SBA. This will help you stay informed of any future changes or expansions to the program.

Finally, don’t try to do this alone. Consider using SCORE, an SBA-sponsored mentorship program, to find a mentor who will help you navigate the process. Once your application is accepted, work with an accountant or bookkeeper to make sure your records are in order along the way. This will maximize your chances for complete loan forgiveness.

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