New PPP funds will run out quickly. Apply anyway
The first round of the Paycheque Protection Program ran out quickly, and the second is likely to be too – but that doesn’t stop you from applying for a loan if you need it.
That was one of the advice of panelists at the Fifth National Small Business Assembly on Friday. Inc. and the United States Chamber of Commerce are co-hosting the free weekly live webinars to help business owners stay informed about available resources during the coronavirus pandemic.
Registration is now open for the sixth National Small Business Town Hall Friday, May 1 at 12 p.m. EST.
After the first $ 349 billion in P3 funds were exhausted in just under two weeks, Congress approved a $ 320 billion more in funds on the Thursday program. President Trump signed the bill on Friday.
While Neil Bradley, Executive Vice President and House Policy Officer, has said he expects the replenished PPP to run out quickly given the volume of loans that are said to be currently on hold, he said that the candidacy was always worth it. “It’s not that complicated, the form isn’t that hard to fill out,” Bradley said. “My advice is, if you need the money, go ahead and apply. Hope you get that slice of money, but if you don’t have one, maybe there will be another slice. “
Bradley expects the package signed on Friday will not be the last stimulus. “The only thing I’m pretty confident about is that there will be some type of additional support for small businesses,” he said. “It could be a replenishment of PPP, it could be a modified PPP program.”
The reconstituted PPP includes $ 60 billion in loans earmarked for small credit institutions and those serving underrepresented communities. “It could be a great avenue to get in,” Bradley said. But he added that you shouldn’t assume that your community bank has already been approved to issue these loans. Some smaller institutions are still in the process of being approved by the Small Business Administration. If you are considering borrowing one, call them ahead of time to find out if they are participating in the PPP.
The legislation also adds $ 10 billion to the Economic Disaster Lending Program (EIDL). The Treasury Department initially ordered the SBA to make repayable advances of up to $ 10,000 within three days to any business that requests them. But the Department soon reduces the amount of the advances to $ 1,000 per employee for a maximum of $ 10,000.
Bradley doesn’t expect those limitations to change, given the number of over-subscribed to the program the first time around. The SBA received an estimate 400 billion dollars of requests for $ 10 billion of available funds.
Nonetheless, if you are able to secure one, an EIDL can be a good resource to use in conjunction with a PPP loan. “The P3 is a great program to help with payroll,” he said, because these loans are fully repayable if you use at least 75 percent to pay your employees. “The EIDL can then be used for capital or other running expenses that you may not have enough PPP money to cover.”