September, 29 2020 | By: LendVer Staff –
The Paycheck Protection Program “PPP” expired on August 8, 2020 with approximately $138 billion in funding remaining, and millions of small businesses still in need. For almost two months Congress has remained gridlocked on passing new legislation that would extend the PPP, potentially add $160 billion of funding, as well as improve the PPP loan forgiveness process—there is even the possibility that PPP loans under $150,000 could be automatically forgiven.
Congress Needs to Act Fast
9/30/2020 Update: The White House just released details on an updated $1.6 trillion package that is much closer to the Democrats last $2.2 trillion proposal. This latest package includes $160 billion of Paycheck Protection Program financing for small businesses. Considering the narrowing gap between the Democrats and Republicans stimulus packages, it is more likely that an agreement could be reached soon, and new economic stimulus could be signed into law.
The PPP was originally structured to provide businesses with 8 weeks of temporary funding to keep their employees paid, when it was believed that the COVID-19 pandemic would only last a few months. The PPP was later extended to 24 weeks, but with the United States now heading into crisis month number eight, the program didn’t go far enough. While Congress continues the debate over new stimulus funding, small businesses are closing their doors forever. Millions of small businesses that never received a first PPP loan, or thought they could manage without one, are running on fumes. Even businesses that were able to obtain a first PPP loan, are now in desperate need of getting a 2nd PPP loan.
Lenders and Providers are Turning Away From the PPP
For weeks after the PPP program lapsed, dozens of SBA lenders and loan providers continued to accept and process applications in anticipation of the program being extended again. Now, with protracted government delays for new stimulus, most of those lenders and loan providers have been forced to suspend accepting and processing PPP loan applications and refocus on their regular financing programs to maintain their own financial viability. Although it is a positive indicator that banks and lenders are resuming regular business financing programs, only the strongest businesses that were not impacted by COVID-19 or that somehow flourished during the pandemic will qualify.
Who Will Accept Applications for a 1st and 2nd PPP Loan?
The Loan Source is one of only 14 non-bank lenders approved by the Small Business Administration (SBA) to provide SBA loans, and has opened its PPP loan waitlist in anticipation of Congress approving an extension to the program. The Loan Source is part of the selective SBA Preferred Lender Program, which is the highest level of approval status that a lender can receive from the SBA. This status enables a lender to directly approve SBA loans, without having to wait for SBA sign-off. The Loan Source was one of the leaders during the first rounds of the Paycheck Protection Program, originating over 5,000 PPP loans totaling in excess of $500 million. Since The Loan Source is not a bank, it does not require an existing relationship, or that you open up an account or transfer funds or other business services to receive a PPP loan. Those businesses interested in applying for a first or second PPP loan once Congress approves an extension to the PPP program, should contact The Loan Source.
If Congress doesn’t extend the Paycheck Protection Program soon, millions of businesses may be forced to close their doors permanently. Even if the PPP is extended, it is essential that more funding be approved on top of the $138 billion left in the program. Business owners can expect the next wave of PPP financing (should it become available) will be reminiscent of the first funding that was passed back in March. PPP funds will go extremely fast as millions of fearful business owners will rush to apply, and frantic lenders will hurry to obtain SBA approval numbers before the system locks them out. Getting in The Loan Source’s PPP loan queue now, will give small business owners a fighting chance should additional funding become available.