7 reasons why you should still apply for a PPP loan

Time is almost up to apply for a loan under the Paycheck Protection Program, the $ 650 billion forgivable loan program targeting small businesses hit by the pandemic. If you’ve been turned down for a loan, or have simply chosen one reason or another, here are seven reasons why you should still apply.

1. There is still money.

The deadline to apply for a PPP loan is June 30. And there are still billions available. According to the latest data from the U.S. Small Business Administration, released June 25, approximately 4.7 million loans have been processed, totaling more than $ 517 billion. About $ 125 billion of loan money is still available.

2. The program has changed.

The PPP has received many rejections in recent months from small business owners who have struggled to get banks to approve their loans. He was also hit for prioritizing more substantial loans from larger companies rather than major street businesses.

But since the program was first announced in March, the SBA has made many updates, including the change in changes authorized by the Paycheck Protection Program Flexibility Act. That reform effort, enacted on June 5, extends the amount of time companies can use their loans and offers more leeway on how to spend funds.

Specifically, the law allows business owners to spend as little as 60 percent of their loan proceeds on payroll expenses such as wages and benefits. Previously, companies needed to spend 75 of their earnings on payroll. The law also extends the repayment period to five years from two previous years.

3. There are alternative loan options.

If you have been rejected for a loan from a traditional bank, you can still get a loan through a non-traditional lender. In April, the SBA approved a series of fintechs, including PayPal, Intuit Quickbooks, Square, and Funding Cricle, to offer loans directly to borrowers. For smaller companies and sole proprietors, a fintech company may be the fastest and most efficient option.

4. Getting loan forgiveness may not be so bad.

Since the PPP was announced, there has been speculation about fairly vague notions of how loan forgiveness was to be calculated. Well, the good news is that many small businesses will have a much easier time with the SBA’s new “EZ” app, which was announced last week and applies to those who took out a loan for $ 150,000 or less.

Independent borrowers or independent contractors are automatically eligible for the EZ application. Businesses with employees can also use the EZ app if they didn’t cut the wages of anyone earning $ 100,000 or less by more than 25 percent. Employers must have maintained their previous staffing levels and average employee hours of paid work. There is an exception for employers who tried, but ultimately failed, to rehire applicants for a position and can demonstrate that the employee will not return.

5. You have more time to use it.

As part of the Flexibility Act, borrowers can choose to extend the amount of time they have to use the loan to 24 weeks. Borrowers were originally only eight weeks old. This flexibility is designed to make it easier for more borrowers to reach full or near full forgiveness.

6. You can’t count on a round 4.

Lawmakers have indicated their willingness to consider a fourth round of stimulus. However, it will take a lot of discussion before anything is agreed. And even if some new program emerges from those small business negotiations, it’s unlikely that it’s open to as many companies as the Paycheck Protection Program. Ami Kassar INC. columnist and founder and CEO of MultiFunding, a small business loan adviser, suggests that the next round will be more industry specific.

7. You can hire employees to help reopen.

Now may be an ideal time to apply for a PPP loan, as many companies are looking to reopen or plan to reopen in the near future. Regardless of your employees’ roles prior to Covid-19, you can always ask them to temporarily change responsibilities to prepare the business for reopening. And even if you can’t get employees back, you won’t necessarily be forced to calculate your forgiveness, thanks to several changes to the PPP in recent months.