Many small businesses are still reeling from the effect of business closures and slow downs. Even “essential” businesses have suffered a loss of income as many consumers stay home and tighten their budgets to make up for lost income. We’ve previously discussed the Federal Payroll Protection Program loan program — the loan that is intended to give a forgivable loan to businesses and sole proprietors/independent contractors to cover 8 weeks of eligible expenses. As you are probably aware, the funding ran out on the first round of PPP loans in less than two weeks. In the days after the funds ran out, news broke that many publicly-held companies received millions of dollars in loans, despite having plenty of reserve funds, leading to an uproar in the small business community.
Round 2 — What Now?
Congress has since authorized a second round of PPP loan funds, making an additional $310 billion in funding available. In addition, stern guidance from the treasury department has lead to many of the larger companies returning the millions prior to May 7, 2020 to avoid potential criminal liability. But the application process is still not easy or user friendly. Larger banks still have long queues of applicants, and getting status information is difficult. This has lead to many seeking alternative routes to apply, which further clogs the system. In fact, last night the SBA actually closed the portal to larger banks to allow smaller banks to submit applications with less competition for an 8 hour period.
If you have been frustrated by the PPP process, please keep trying. Your best bet is to seek out a smaller community or online lender who will give you a face to go with your application and talk you through the process.
Additional Guidance for the Self-Employed
If you are self employed, the SBA has put out additional guidance in the form of an Interim Final Rule explaining how to calculate your average monthly income for purposes of applying for a PPP loan. If you need help applying for a PPP, please set up an intake call to discuss how we can help you apply for PPP, and determine whether that is the best option for you.