Small business owners nationwide are struggling during the coronavirus pandemic causing many companies to close their doors, leaving employees without pay. However, on April 21, 2020, the Senate passed a bill that will provide an additional $310 billion for the Payroll Protection Program (PPP) that began as part of the CARES Act stimulus legislation. Once the vote passed, Treasury Secretary Mnuchin stated that the recent bill is likely to be the final amount for PPP funding. Therefore, small business coaches at Bryant Consultants are sharing how to get in on PPP before funds run out again.
New PPP Information
The plan for voting the additional funding occurred Thursday, April 23, 2020, prompting the President to sign the bill into law. The Small Business Administration (SBA) will open funding for PPP loans beginning Thursday evening or Friday morning. Considering the SBA is currently backlogged with applications, there is no way to determine how long the financing could last. Out of the entire amount of $310 billion for PPP loans, $60 billion is allocated to smaller banks with less than $50 billion in assets. Also, the bill is adding $60 billion to the Economic Injury Disaster Loan (EIDL) program, which will include $10 billion for EIDL grant funding.
PPP Application for Funding
As each small business is unique in its needs, there is not a single answer to address all small businesses. Therefore, deciding how your business should approach PPP funding depending on your level of risk, business cash flow needs, and the guidelines by your state for reopening businesses. If you are unsure of how to approach PPP funding and need guidance through the process, your small business consultants at Bryant Consultants can provide insight and direction for the success of your small business. Based on most small businesses, your business should fall into one of the groups listed below.
- Applied and Received – When the original PPP funding was available, you immediately applied and have received your funding. Although additional funding through the PPP may not be as crucial for you, applying for the EIDL program may benefit your business. If you have not yet applied for funds through EIDL and you know your business will need the funds during the summer and fall, Bryant Consultants recommends applying for EIDL funding. Even though you can apply for funds from both resources, you cannot receive loan forgiveness on both the EIDL and the PPP loan.
- Not Applied, State Reopens in May – After hearing that no more funds were available, you did not apply. However, with your state scheduled to reopen in May, applying for the additional cash flow during the second, and most likely the last chance for funding is recommended by your business consultants at Bryant Consultants. The receipt of funds may follow a 10-day delay, so your first disbursement should arrive the first week of May, providing up to six weeks of payroll to count towards forgiveness.
- Not Applied, State Reopens After June 1 – Depending on your business needs, you may not decide to apply for a PPP loan, but instead, apply for the EIDL grant and capitalize on the Employee Retention Tax Credit. The two benefits calculate approximately 30-40% towards loan forgiveness for the PPP funds. To make an educated and knowledgeable decision about the PPP loan and not feel as though you missed out on the opportunity, it is essential to estimate how much of the PPP loan you could have forgiven. Remember, any portion of the PPP funds not used for qualified expenses is not eligible for forgiveness and is a loan requiring repayment, making it no more than a short-term operating capital loan.
Small Business Consultants
With the SBA system backlogged and funds set aside for small banks, most larger banks have ceased taking applications. Therefore, if your bank is no longer accepting applications, find a local bank or credit union, and apply for your PPP loan. If you are unsure about how the PPP could help fund your small business, feel free to contact your small business mentors at Bryant Consultants by calling (877) 768-4799 or visit us online today. To ensure that you receive the latest updates, please follow us on Facebook and Instagram.
