How is your Paycheck Protection Program (PPP) loan request coming along? Well, you’re not alone if your efforts don’t seem to bear any fruits.
It’s unfortunate that small businesses, who were the target benefactors of PPP COVID-19 relief funding, have to sweat to get a slice of the cake.
The CARES act allotted billions of dollars to help businesses through two programs; EIDL and PPP. The Paycheck Protection Program was exclusively meant to help small enterprises retain staff and cover payroll and other expenses amid coronavirus.
Round One of the funding worth 349 billion dollars ran out sooner than we expected. But the SBA chipped in another 310 billion dollars, which is currently in disbursement by banks and internet lenders.
Why Did Your PPP Loan Application Fail
With many small business owners and lawmakers questioning the transparency of PPP loan disbursements, it can be difficult to tell why your application failed.
Such technicalities aside, though, your Paycheck Protection Program Loan request might have been rejected for the following genuine reasons.
- Minor oversights during application such as a wrongly written EIN or SSN
- Failure to meet the specific lender terms. E.g., you don’t have a lending history with them; your quoted amount lower than their chosen cap
- The application contained inaccurate data, like monthly payroll amount, employee count, etc. NB: On providing inaccurate data, offenders may face sterner punishments as the Treasury Department announced plans to start a probe into fraudulent PPP loan requests.
But rejection is no reason to panic because, after all, the Relief Fund reserves will soon run out money. And there’s more good news to cheer you up.
Payroll Tax Deferral & Employee Retention Credit
Applicants who failed in their PPP loan endeavors have been considered under the CARES Act. The regulation included payroll tax deferral for businesses that do not enjoy loan forgiveness under PPP and EIDL programs.
This tax deferral program means employers who qualify can defer payroll-linked tax payments accrued between Mar 27, and Dec 31, 2020.
The same group can also enjoy employee retention credit on payroll taxes for wages paid between Mar 13 and Dec 31, 2020.
Remember, businesses that receive a PPP loan and enjoy partial or full forgiveness are NOT entitled to tax deferral.
What Other Sources of Funding Can You Rely On?
But federal relief loans are not your only hope for funding. You can seek out funding from other alternative sources such as;
- Merchant cash advances (MCAs)
- Equipment financing
- Invoice factoring
- Crowdfunding
- Vendor credit
- Online term loans
- Business lines of credit
- Business credit cards
Also, the Small Business Administration still has several loan programs going on. Try any of the following depending on your needs; SBA 7(a) Loans, SBA Express Loans, SBA 504 Loans, SBA Microloans.
Wrap up
A negative PPP application response shouldn’t dictate your business’s destiny. Always be willing to search other places, if you hit rock bottom.