June 2, 2020 | By: LendVer Staff –
The coronavirus aka COVID-19 is lasting much longer than most had thought and all had hoped. The wake of its destruction has left a decimated U.S. and global economy, and small businesses struggling to stay afloat and re-open as local governments begin to relax stay-at-home guidelines. The Paycheck Protection Program (also known as the PPP) is a program that was released by the Small Business Administration on April 3, 2020 to help supply funding to small businesses, nonprofits, sole proprietors, and business entities affected by COVID-19. $660 billion of total PPP financing was approved under The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act. Business owners interested in applying for a PPP loan must do so before June 30, 2020.
Relaxing PPP Loan Terms
It was expected that when the second round of PPP funding was released on April 27, 2020, that funds would go in a matter of days. As a surprise to many, there is over $100 billion of PPP funding still available. Changing SBA, Treasury, and IRS guidance has caused many business owners to return their PPP loans, or choose not to apply for a PPP loan at all. However, the House has recently approved a bill to lengthen the time that PPP funds can be used to pay employees from 8 weeks to 24 weeks. Additionally, these new relaxed guidelines (if signed into law), will allow up to 40% of PPP funds to be used for non-payroll related business expenses (i.e. mortgage, rent, utilities, etc.). A basic overview of PPP loan terms are listed below:
Loan sizes up to $10 million
- Interest rate of 1%
- Maturity of 2 years
- First payment deferred for six months
- No collateral
- No personal guarantees
- No borrower or lender fees paid
- Loan forgiveness available
Where to Get a PPP Loan
If you would like to signup to secure your spot for the next round of PPP loans, and have access to an easy, automated application process, then the below PPP lender is an excellent option (the PPP expired on August 8, 2020 and further legislation will hopefully be approved to extend the program) .
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.
Although popular interest in the PPP program has waned, obtaining a PPP loan is still an excellent opportunity. The relaxed PPP guidelines and forgiveness parameters that should be signed into law soon, will make the program more appealing than it already is, and will likely accelerate the depletion of the remaining program funds. Even if your PPP loan does not become fully forgivable, you’ll still have a loan to help your business survive or grow, and at terms that would never have been available to you under regular circumstances.
Don’t hesitate to contact us if you are unsure of which financing option is the right choice for you, or if you need additional lender recommendations beyond those mentioned in this article.