PPP – Small Business Information

On Friday, March 27, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law to provide emergency assistance and health care response for individuals, families, and businesses affected by the 2020 coronavirus pandemic.

The SBA’s Paycheck Protection Program (PPP) is a primary part of the CARES Act stimulus plan and allocates $349 billion in conditionally forgivable loans to small businesses for payroll and overhead. These loans do not have to be repaid as long as they’re used for certain intended purposes, as described more below. All types of businesses with 500 or fewer employees can apply – including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors. Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries.

The maximum loan size is 2.5 times your average monthly payroll costs for the past year. That amount is subject to a $10 million cap. If you are a seasonal or new business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee.

You will owe money when your loan is due if you use the loan proceeds for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. Due to high demand, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. You will also owe money if you do not maintain your staff and payroll.

As of early April 2020, we have begun to see funding in PPP loans. Due to the first-come, first-served nature of PPP loan application processing, you should consider applying for a PPP Loan as soon as possible.  Senator Marco Rubio has recently estimated that all $349 billion will have been funded by June 6, 2020. If you have an existing relationship with a bank that can provide a PPP Loan, apply directly with them as soon as possible. You may be more likely to receive fast PPP funding if you have an established history with a bank who provides it.

If you are having trouble getting funding using your direct bank, you can use SBA.com as a backup or to try to get your loan faster. The advantage of submitting a PPP request through a fintech company like SBA.com (versus a single lender or bank), is gaining access to our extended network of lenders which includes three hundred different lenders and institutions who can fund PPP loans. While many lenders are taking applications, it’s especially common in these preliminary stages to see them run out of funding, bandwidth, manpower or run into limiting regulations by the government. 

Submitting your request to SBA.com can significantly increase your odds of receiving PPP funding as quickly as possible in these early stages. We are working with a large team of funding managers who will guide you on the phone to help you with documentation requirements, average monthly payroll calculation, and other essential steps in the application process. Once we have your completed paperwork, the funding manager will present your application to a lender that is funding PPP loans at that time. If one lender stops funding new PPP loans, your PPP application will be presented down the line, from lender to lender, until it has reached the end of our large extended network. We recommend that you ultimately choose whichever option will provide you with the fastest funding since loan terms of PPP loans are the same no matter what lender you use.

Our trusted partners have funded $2 Billion in business loans the last 7 years and are fully equipped to help you through the process. If you have questions, you can chat with an agent after you make an initial inquiry.

You can inquire at your bank and through SBA.com to get access to multiple lenders, however you are only allowed one PPP loan. If you’ve already applied for and been approved for an Economic Injury Disaster Loan (EIDL), you can still apply for a PPP as EIDLs can be refinanced into the PPP.

You’ll need some documents to complete the process, so make sure you have them handy:

    1. Payroll Report:
      1. Payroll Register for the full 2019 year
      2. Payroll Register for all available months in 2020
    2. ID Verification:
      1. Driver’s License (front and back) or other government issued identification
    3. If you have employees:
      1. All 2019 IRS Form 941s or 2019 IRS Form 944
    4. If you are an independent contractor:
      1. 1099-MISC
    5. If you are self employed:
      1. 2019 IRS 1040 Schedule C
      2. 1099-MISC for each self employed owner