Who Is Eligible To Apply For A Ppp Loan Through Square Capital
At this time, only businesses with a Square account will be able to apply through Square Capital. Sole proprietors, independent contractors, self-employed persons, and small businesses can apply. We are currently rolling out applications to sellers that receive the first PPP loan through Square Capital. You may be eligible for your second PPP loan if your business:
Received a first PPP loan through Square CapitalUsed or will use the full amount of their first PPP loanHas fewer than 300 employees. If your business is a hotel or restaurant, you must have fewer than 300 employees per locationExperienced at least a 25% decrease in revenue in a quarter in 2020 relative to a quarter in 2019 or during the year 2020 as compared to 2019.
We expect to roll out applications to sellers applying for their first PPP loan through Square Capital in March.
Apply Through Multiple Lenders
If you applied for the first round of PPP last year, we recommend that you apply through the same lender. They already have your information on file and are likely familiar with your business and status from the first round of funding. Whats changed with the January expansion, is that its safe and beneficial to apply through multiple lenders.
You cannot get more than one PPP loan this round, but thanks to the SBAs E-Tran system, which is how your lender submits your application, they will only process your first completed application. If approved, the SBA will reserve your funds and assign you a PLP number. Youll then receive closing documents from your lender and theyll finalize your loan.
At this point, any other applications that have been submitted will be automatically rejected by this system with no complications to your approved loan. For a full rundown of this process, check out this article by Bench.
*Editors note: Special thanks to LivePlan reader, KC, for notifying us of this update to the PPP application process. They also noted that its best to be courteous and withdraw any open applications once youve been approved. But dont do this until youve received an SBA loan number and promissory note to sign.
What Happens After I Apply For My Emergency Ppp Loans With The Sba
After you apply for your PPP loan/s for your business, your application and documentation will have to be reviewed and your application approved before you can receive your loan money.
Once your application is completed, it will be placed in a virtual queue for processing by a loan officer. This can take a few days depending on demand. If you have all your documentation in place, your approval can take as little as a day or two, depending on your lender.
Once your loan is approved, estimates are that it should take approximately 5-7 business days for your funds to become available. By law the your lender has up to 10 calendar days to fund your account once it receives notification of your loan approval from the SBA.
Please note that there is high demand for this program, so delays are to be expected from time to time. We urge you to be patient and restrict your queries to vital questions to avoid swamping your lenders customer service resources and causing further delays.
When you apply for PPP loans using Womply as your approved PPP loan agent, well send you an email containing updates, next steps, and resources to help you throughout the process. Remember, applying for an SBA/PPP loan is free. Nobody should charge you any money for helping you through the application process.
Fintech Lenders Have Been Shut Out Of Funding
Fintech, or financial technology, has set up the infrastructure to fund borrowers as quickly as possible. After all, technology controls how quickly borrowers can get funded , and tech companies are obviously going to have the best technology.
Unfortunately, up until this point, the US Treasury has not approved any fintech lenders to fund PPP loans. We expect to see that change soon.
That doesnt mean that you cant apply through a lending marketplace. Lendio has made it simple and quick for small businesses to apply for a PPP loan , and we will pair you with approved SBA lenders. Once fintech lenders are approved, itll give borrowers more options and speedier funding.
Does The Lender Actually Underwrite Each File
Yes. The lender will review each application and the necessary payroll documents to make sure that the loan amount is calculated correctly. They will also validate that the business has fewer than 500 employees and was in business prior to February 15, 2020. If the lender believes that the loan amount calculation was incorrect or doesnt have proper documentation, they will reach out to you for additional information.
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Patience Doesnt Have To Be A Virtue
When pursuing an SBA loan, patience is a virtue. But, you dont necessarily need to wait out the approval process. The rise of fintech has introduced a segment of online lenders like Funding Circle that are designed to deliver speedy business loans in a fraction of the time it takes the government agency. The answer to how long does it take to get an SBA loan? doesnt have to be one that deters you. Get funding quickly and easily: You can apply directly through Funding Circle for an SBA 7 loan today.
How Long Do They Take
Traditional bank loans take longer to get than SBA loans or financing through an alternative lender. The application for a bank loan usually requires a meeting at the institution and hard copies of documents like financial and bank statements. Working with the lender to get together the necessary paperwork could take as long as 30 days.
Once the application is complete, the lender will start the underwriting process which can take up to two weeks. Once the underwriting process is complete, the lender will send a commitment letter to you and schedule the closing. The time between completing the application and being funded can be anywhere from a couple of weeks to another 30 days.
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What Payroll Costs Are Eligible For Forgiveness
- Salary, wages, commissions, or similar compensation
- Cash tips or the equivalent
- Payment for vacation, parental, family, medical, or sick leave
- Allowance for separation or dismissal
- Independent contractor or sole proprietors only: wages, commissions, income, or net earnings from self-employment, or similar compensation
Employee benefits, the total amount paid by the borrower for:
- Employer contributions for employee group health, life, disability, vision, or dental insurance, including the employer contributions to a self-insured, employer-sponsored group health plan, but excluding any pre-tax or after-tax contributions by employees. Borrowers are not to add contributions for these benefits made on behalf of a self-employed individual, general partners, or owner-employees of an S-corporation, because such payments are already included in their compensation.
- Employer contributions to employee retirement plans, excluding any pre-tax or after-tax contributions by employees. Borrowers are not to add employer retirement contributions made on behalf of self-employed individual or general partners, because such payments are already included in their compensation.
- Employer state and local taxes paid by the borrower and assessed on employee compensation , excluding any taxes withheld from employee earnings.
The Weight Of Expectations
As the SBA works to smooth out the PPP process, Asgeirsson, who talks with accounting firm leaders almost every day, acknowledges there is a lot of frustration among practitioners and clients. One issue, he suggested, is that many people expected the current PPP program to operate in similar fashion to the first round of PPP, which distributed its initial allotment of $349 billion in less than two weeks after opening in April 2020.
CPAs should inform clients that delays are possible and that questions are not always quickly or easily answered, AICPA executives have said. In addition, though some applications are being held up, borrowers should be aware that a large percentage are getting through and that with more than half the $284 billion in PPP funding still available, many expect there to be enough money in the system to fund loan requests through the March 31 deadline for applications.
Weve all had to get our arms around how to support this for the business clients, Asgeirsson said. At times being the business adviser is to be dealing with these unknowns.
The full Feb. 18 AICPA Town Hall can be viewed on AICPA TV.
AICPA experts discuss the latest on the PPP and other small business aid programs during a biweekly virtual town hall. The webcasts, which provide CPE credit, are free to AICPA members and $39.99 for nonmembers. Go to the AICPA Town Hall Series webpage for more information and to register.
Jeff Drew ” rel=”nofollow”> ) is a JofA senior editor.
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Received A Contract But Not Funded Yet
If you have received and signed a contract, but it hasnt been funded, there could be a few reasons. Your application may have errors on the contract, including the wrong name, wrong bank routing number, or incorrect bank account number. Its also possible your application hasnt passed the lenders quality control review.
As financial institutions and fintech providers across the country work diligently to process these loans, we implore applicants to proactively supply as much documentation as possible. We know how badly you and your employees need these relief funds, and we want to help you get funded as expeditiously as possible. Thankfully, money remains in the program and with the recently-passed extension, lenders can continue to push applications across the finish line until the funds are exhausted.
What Are Gross Receipts
SBA defines gross receipts as all revenue in whatever form received or accrued from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees or commissions, reduced by returns or allowances. Generally, receipts are considered âtotal incomeâ plus âcost of goods sold,â and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms.
Gross receipts do not include the following: taxes collected for and remitted to a taxing authority if included in gross or total income proceeds from transactions between a concern and its domestic or foreign affiliates and amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker. All other items, such as subcontractor costs, reimbursements for purchases a contractor makes at a customer’s request, investment income, and employee-based costs such as payroll taxes, may not be excluded from gross receipts.
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Didnt Receive An Sba Number + Sba Errors And Hold Codes
If you dont have an SBA number yet, it means that your application is likely incomplete. You need to provide all of the required documentation the more you give, the better.
If you have provided all of the documentation and still dont have an SBA number, it is likely that your application has been declined by the SBA or is under review. There are several different reasons an application may be under review. The most common reason for a review is a duplicate submission, meaning the borrower filled out an application with another lender who has already submitted it to the SBA. Here are the top 5 reasons that applications are being held by the SBA:
Sba 504/cdc Loan Process Vs Equipment Financing Timeline
If youâre looking to finance a fixed asset with an SBA 504/CDC loan, but you want to do it faster than the SBA loan timeline allows, l0ok into equipment financing. Working with a lender to get financing specifically for equipment allows you to work faster and with less paperworkâin some instances, all you need to get the process going is a quote for the equipment you want to finance.
A sample timeline could be:
And equipment financing is easier to qualify for than an SBA loanâsince the loan is self-secured .
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Have Your Paperwork Ready
While the SBA has an application that they have given banks, many banks have their own process. You will need:
- Tax returns for at least 2019, but if you have 2 years of tax returns easily available, get those ready.
- Payroll reports that show clearly how you achieved your total loan amount.
- Legal company formation documents or organization legal structure/setup, ownership, etc.
- You will need to document in one way or another how COVID-19 has negatively impacted your business. The easiest way to do this is to compare your sales from February to April 2019 to your 2020 sales for the same months. Also document the downturn in sales from January 2020, monthly, through the current month. The last piece is to create a forecast of the continued impact on your sales based on the current trends. If you followed step 2 correctly, you should have this forecast scenario in hand already.
My Lender Said My Ppp Loan Is Being Reviewed What Does That Mean
In some instances the Second Draw loan process may take longer for the SBA to review and approve applications. As a result, some lenders and businesses are getting the following automated message from the SBA:
You have attempted to submit a PPP 2nd Draw request. Your original First Draw PPP Loan is still under review by the SBA and has associated holds that must be cleared before 2nd draw processing can proceed. We apologize for this inconvenience. To address your specific loan situation, please use the Forgiveness platform Inbox to request escalation of your loan review by the SBA. Error: E0117
Dont be alarmed if you get this message. It simply means that the processing and final approval of your loan may take a little longer.
Go deeper: Why is my PPP loan delayed? Some possible causes.
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The Sba Loan Process Vs Other Business Loans
If waiting 60 to 90 days isnât in the cards for you, take a look at how the SBA loan timeline compares to other types of small business financing.
Although SBA loans generally offer the best terms out there, you might find thereâs another option worth considering, depending on your specific needs and plans.
What If I Plan To Sell My Business Can I Still Apply For Loan Forgiveness
You should consult your attorney to understand the potential ramifications and additional requirements of completing the sale of your business while you have an open PPP loan. If you sell your business before completing the loan forgiveness process, you may jeopardize your forgiveness claim.
You can request to have your planned ownership change approved by U.S. Bank.
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Your Guide To The Sba Loan Process
If youâre a small business owner in search of financing, odds are that youâre hoping to get approved for a loan sooner rather than later. Many business owners seek out a small business loan because of dwindling cash flow or an urgent need for more working capital.
In most situations, SBA loans are not well suited for business owners who need cash right away. The entire SBA loan process generally takes about 60 to 90 days. Compared to other small business loans and alternative financing products, it can take a while to close on an SBA loan because of the high volume of paperwork and documentation that you need to provide.
Fortunately, there are some things you can do to speed up the SBA loan process. And when you see the process through to completion, the payoff is worthwhileâyouâll end up with a low-interest, long-term loan with manageable payments. Sometimes, just having transparency into the process helps, so weâll explain the SBA loan process in detail and show you how much longer it really takes compared to other business loans.
Paycheck Protection Program Faq
|While the second round of PPP was scheduled to run through May 31, 2021, weve been notified by the SBA that funding for new applicants is no longer available. As such, we stopped accepting new loan applications at the end of the day on May 4, 2021.|
|Do you want to stay up to date about what other businesses are saying about PPP, along with new developments from Square? Head over to our PPP Seller Community to stay informed.|
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