Within days, the first round of the Paycheck Protection Program (PPP) released at the start of April – $349 billion in funding – ran out of cash. The second round of funding is now available, as small businesses continue to struggle with almost no end in sight. The race is on for the small businesses owners that have yet to secure funding.
On Friday, April 24, President Donald signed the $484 billion COVID-19 rescue bill, which includes $310 billion in new money for the latest bailout. This funding has been designated to help small business owners keep their employees on the payroll. As long as the business keeps their workers on the payroll for eight weeks and it is used for payroll, rent, mortgage interest or utilities, the loan will be forgiven.
“The PPP has supported more than 1.66 million small businesses and protected over 30 million jobs for hardworking Americans,” Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza said in a joint statement. “With the additional funds appropriated by Congress, tens of millions of additional workers will benefit from this critical relief.”
However, critics of the PPP feel that too much of the initial money went to the big banks. These lenders then prioritized customers who were seeking large loans, or the lender already had an existing relationship with, all in an effort to maximize profit and minimize risk. According to a survey conducted by the National Federation of Independent Business, the first round of funding only covered 20 percent of applicants.
This new, second round of funding includes provisions that should ensure financial assistance is funneled to the smaller businesses struggling to stay afloat amid the coronavirus crisis. $60 billion has been set aside for small- and medium-sized community banks, credit unions and less traditional lending companies (that are SBA-approved).
What is the Next Step for Your Small Business?
If you have already applied for funding for your small business, there is no need to re-apply now that the Paycheck Protection Program is once again up and running. Your application is already in the system. While it is concerning that 80 percent of the initial applicants are still waiting for approval, the situation appears hopeful since the new installment is supposed to go further.
If you have not yet submitted an application, you have the opportunity to apply and get a better response than you would have the first round. The key is to make sure the lender you are considering working with has been approved by the SBA to lend through the PPP. You also want to partner with a provider that specializes in working with your business type and industry, which ensures they understand the unique challenges you face.
How to Apply for a Coronavirus Small Business Loan
The Paycheck Protection Program loan is available through many banking institutions and credit unions. To download the PPP borrower application form, visit the Small Business Application’s website. Their site also provides a list of everything you need to make a successful application. However, because of the influx of application from struggling merchants, your best chance of receiving funding is to apply with a finance provider, like First American Merchant.
Our business funding will help your business move forward and continue to grow. Due to our flexible funding options, poor or no credit is not an issue. You can still secure the funding you need to boost cash flow and weather the other challenges business owners face during this time. The application process is fast, simple and hassle-free.