Yesterday (April 21), the Senate passed additional funding for the PPP loan program. Here is a summary of what was passed:
- $484 billion – size of total relief package
- $310 billion – allocated to PPP
- $250 billion – available to all banks
- $60 billion – reserved for “smaller lenders”
The House of Representatives needs to approve this funding and is set to vote on Thursday (4/23); if passed, the President is expected to sign this into law shortly thereafter. We expect that the SBA system will reopen the funding of the PPP loans this week—possibly as early as Thursday! If you have not yet applied for the PPP loan, and want to do so, we recommend that you apply today.
How long will these funds last?
Although it is impossible to tell how long the funds will last, we anticipate that the PPP loan funds will go very quickly. There is currently a backlog of applications in the SBA system waiting for more funding. Those who are already in line will be approved first.
Additionally, Treasury Secretary Steven Mnuchin has implied that this will be the last round of PPP funding. If the economy starts to open up, we expect that he will be right.
A quick review of the PPP loan funding process:
- You apply with your bank; the application is approved and sent to the SBA
- The SBA receives your application and does their own verification process (we assume this is on a first in, first out basis) – we have no way to gauge how long this will take
- Once approved, the SBA sends your bank confirmation and your bank can approve the loan and release the funds
How long does this process take?
There is no telling. Many of our clients applied with their banks on Monday, April 6, and have not received funds; others received funds within days of applying. Some had success with large banks, some have not. Others had success at small banks, while others who applied with small banks were not successful.
What should you do now?
If you have not yet, apply today. We have stated from the beginning that we expect all our clients will apply for this loan; at 1% interest and with the opportunity to get much of the loan forgiven, we do not see a downside to doing so. If you choose to wait to apply at this point, you’ll likely be waiting forever.
- If you have not applied for the PPP loan, contact your bank to apply today – get in line!
- If you have already applied and not yet received funds, contact your bank to ensure that your application is still active and that you are already in line for the next wave of funding.
- If your bank cannot get the loan processed, or is not accepting applications, contact another bank who will do the loan for you, such as a small, local bank, or an online bank such as PayPal or Kabbage.