Paycheck Protection Loan Forgiveness Faq
Once youâve received your Paycheck Protection Program loan, youâll need to use the funds for specific expenses and meet the requirements to have your loan forgiven. While new laws and regulations may impact the process and requirements, weâve answered some of the most common questions based on the latest guidance. Please note that these answers are subject to change based on further guidance and in particular, SBA guidance.
You will need to apply for forgiveness with the lender that issued your loan. In this case, Funding Circle. You will receive a personalized email that will walk you through the Paycheck Protection Program Forgiveness process when your personalized forgiveness application is available to be completed.
You can apply for loan forgiveness after the end of your âcovered period.â Your covered period is the time during which the money you spend on eligible expenses may be forgivenâany amount remaining after the end of your covered period wonât be forgivable.
You may elect a covered period ending at the point of your choosing between 8 and 24 weeks after origination until May 31, 2021.
The âloan forgiveness covered periodâ is the period beginning on the date the lender disburses the PPP loan and ending on any date selected by the borrower that occurs during the period beginning on the date that is 8 weeks after the date of disbursement and ending on the date that is 24 weeks after the date of disbursement.
For PPP loans less than $150,000:
Economic Injury Disaster Loans
In response to the Coronavirus pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid. If a business received an Economic Injury Disaster Loan advance in addition to a Paycheck Protection Program loan, the amount of the Economic Injury Disaster Loan advance will be deducted from the PPP loan forgiveness amount by SBA.
The SBAs Economic Injury Disaster Loan provides vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic.
This program is for any small business with fewer than 500 employees , private non-profit organization or 501 veterans organizations affected by COVID-19.
Businesses in certain industries may have more than 500 employees if they meet the SBAs size standards for those industries.
The Economic Injury Disaster Loan advance funds will be made available within days of a successful application, and this loan advance will not have to be repaid.
Top Financing Options For Small Businesses In 2022
There arent any more PPP checks to be distributed, but that doesnt mean there arent plenty of choices for small business owners in need of financing. While none of these options are quite as attractive as PPP loans , they are long-term solutions untethered from the public health crisis and the governments response to it.
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About The Ppp Loans In 2021
People who have borne the brunt of the pandemic, like employees, owners, independent contractors, and self-independent businesses, could all take a prescribed limit with the total budget assigned for PP as up to $10 million. PPP Loans are SBA unforgivable loans that can be obtained in an emergency under section 7 in 2020.
Tracker: Paycheck Protection Program Loans
Thomas Wade
Introduction
The following tracker uses the most recent data from the Small Business Administration to chart the allocation of Paycheck Protection Program funds.
Context
In the face of the economic and social disruption caused by the coronavirus, Congress has enacted three economic relief packages. With an estimated $2 trillion price tag, the third package, the Coronavirus Aid, Relief, and Economic Security Act, is perhaps the largest and most significant federal emergency aid bill in U.S. history.
The CARES Act set aside $349 billion for the relief of small businesses, to be administered by the SBA in the form of the PPP. The SBA commenced the PPP on April 3, 2020, and closed the program on April 16, 2020, on the exhaustion of the $349 billion appropriated by Congress . Congress later provided an additional $320 billion for the PPP in H.R.266, the Paycheck Protection Program and Health Care Enhancement Act . This brought the total funds available to the SBA and the PPP to $669 billion. The PPP program was due to expire at midnight on June 30 with funds remaining, but just hours for the expiration of the program Congress authorized an extension through August 8. This date passed without a second extension to the program.
On May 5 the SBA announced that all funds for Round Three, and the PPP as a whole, had effectively been exhausted.
Summary Data
On May 5 the SBA announced that all funds for Round Three, and the PPP as a whole, had effectively been exhausted.
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What You Need To Know About Round 3 Of The Paycheck Protection Program
On Dec 27, 2020, the Consolidated Appropriations Act was signed into law by then-President Donald Trump. This act was put into place in order to, among many other things, appropriate new funding for the Paycheck Protection Program .
The PPP has been lauded and criticized by people on both sides of the isle. Supporters note that businesses need to be kept afloat during a time when many workers are being laid off, whereas critics see it as a way for businesses to get large low-interest forgivable loans while still cutting their payroll. One thing is certain, though: the PPP provides funding for businesses that may not otherwise be able to pay employees still on their payroll, particularly if theyve had to shut down or slow down their business activities.
In this article, you will learn about Round 3 of the Paycheck Protection Program, who qualifies for Round 3 of the PPP, and what you can expect.
Harvest Small Business Finance**
With headquarters in Laguna Hills, California, Harvest Small Business Finance is a non-bank lender that serves small business borrowers who have traditionally been ignored by large, regional, and community banks. It has halted accepting PPP loan applications from existing and new customers. Its site says it will resume if there is a third round of funding. For updates, go here.
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List Of Community Financial Institutions In Multiple States
Clearinghouse CDFI
This CDFI is in Lake Forest, CA.
They help businesses in Arizona, California, Nevada, and New Mexico.
To get more info, you can:
- Visit their website clearinghousecdfi.com
- To get more info, you can call them at 949-859-3600
Lendistry
This CDFI is in Los Angeles, CA.
They help businesses in California, Georgia, Maryland, and Pennsylvania.
To get more info, you can:
- Visit their website lendistry.com
- To get more info, you can call them at 562-242-2900
Rural Community Assistance Corporation
This Community Financial Institution is in West Sacramento, CA.
They offer to fund businesses in Arkansas, Arizona, California, Colorado, Hawaii, IDAHO, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.
To get more info and their application process, you can:
- Visit their website rcac.org
- To get more info, you can call them at 916-447-9832
LiftFund
This CDFI is in San Antonio, TX, and they will help you to access funding:
They help businesses in Alabama, Arizona, Florida, Georgia, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, South Carolina, Tennessee, and Texas.
To get more info, you can:
- Visit their website liftfund.com
- To get more info, you can call them at 888-215-2373, Ext. 111
Note: They have a voice mail available to leave your information, and they call you.
DreamSpring
DreamSpring is in Albuquerque, NM.
They help businesses in Arizona, Colorado, Georgia, Nevada, New Mexico, North Carolina, and Texas.
Colorado Enterprise Fund
United Midwest Savings Bank
Based in Columbus, Ohio, United Midwest Savings Bank is the 13th largest SBA lender in the country, based on number of loans. It is currently accepting PPP loan applications only from existing customers, and does not provide any information about its application process on its site. If you wish to contact the bank, the phone number for the large SBA loan division is 245-3033 and the number for the small SBA loan division is 211-7897. Consolidated assets: $292 million.
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Who Qualifies For Ppp Round 3
In order to qualify for PPP Round 3, your business will need to have been in operation on or before February 15, 2020. This is to make sure that only businesses that have been affected by the pandemic are able to get funds.
PPP Round 3 applies to businesses with 500 or fewer employees, or if youre getting a second draw loan, 300 or fewer. They also apply to businesses that are categorized as being Accommodation or Food Services and have 500 or fewer employees per location . This means that even if a business under Accommodation or Food Services has far more employees, they can still qualify if they have 500 or fewer employees per location.
Eligible entities are as follows:
- Corporations that meet the eligibility criteria:
- Independently owned franchises
- Self employed persons, contractors, and sole proprietors
- Businesses or nonprofit organizations that are listed under 501, 501, or tribal businesses under 31
- Housing cooperatives
- Section 501 organizations that meet the eligibility criteria
- News organizations controlled by a business or nonprofit broadcasting entity categorized under NAICS code 511110 or 5151 that also meet the eligibility criteria
The Good The Bad And The Ugly Of Focusing On Payrolls
In May, the progressive pollster Data for Progress conducted a poll on behalf of Recode in an effort to gauge public perception of the PPP and how Americans feel about it. It surveyed 1,235 likely voters online.
The poll revealed some dissonance in how Americans think about small business and who is and isnt deserving of help. When asked whether all businesses should get help to keep workers paid, 70 percent of respondents said yes. But when asked whether support should be capped at businesses with 500 employees, 76 percent said yes. And when asked about whether the Los Angeles Lakers NBA team, which got a loan and then returned it after public outcry, should have given the money back, 75 percent said it was the right thing to do.
When asked what the goal of federal assistance to businesses should be, 58 percent of respondents said it should be to keep workers paid, while 24 percent said it should be to keep businesses afloat and that explains, at least partly, why the program has attracted controversy. It hasnt been possible for many businesses to accomplish both of these goals at the same time, so they didnt get what they needed to truly survive the pandemic, especially sole proprietorships or ones with just a few employees. Yes, covering paychecks is important. So is paying utilities and rent.
Related
Government loans meant to bail out small businesses could become a financial burden themselves
The focus on payrolls has caused other wrinkles as well.
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You Can Apply For Funding With Camino Financial A Cdfi Lender Ready To Help You
Camino Financial is the first neo-CDFI in the United States. That means we are the first-ever AI-powered CDFI. We use the power of technology to offer the financial services economically disadvantaged communities need.
We are a certified CDFI in Los Angeles, CA, that serves the whole country .
As a CDFI, we help low-income communities nationwide through our financial services.
We offer financial products that are affordable and easy to get. With us, you can get:
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Loans Made To Other Entities
On April 28, Treasury SecretarySteven Mnuchin said that the Small Business Administration would do a “full review” of each PPP loan exceeding $2 million.Treasury SecretarySteven Mnuchin warned that businesses would held be “criminally liable” if they receive a loan exceeding $2 million and do not follow the rules.
On May 13, the Small Business Administration said that any business that, together with its affiliates, received a total of less than $2 million of PPP loan proceeds will be assumed to have made the good-faith certification of need in good faith. If the Small Business Administration determines that a business “lacked an adequate basis” for certifying the necessity of the PPP loan, the Small Business Administration will request business repay the outstanding PPP loan balance, and the business will become ineligible for PPP loan forgiveness. If the business subsequently repays the loan, no further enforcement actions will be taken on the matter.
On May 5, the Small Business Administration said that PPP loans received by nonprofit organizations are not considered federal financial assistance, are not subject to audit requirements under Uniform Guidance, and need not be included in the organization’s Schedule of Expenditures of Federal Awards.
At least one of the people involved in the 2021 United States Capitol attack received a PPP loan. Richard Barnett received a $9,300 PPP loan on April 14, 2020.
Alert: Ppp Funding Exhausted For Most Lenders
May 11, 2021 | Blog, COVID-19 Strategy Hub | Bert Mills, CPA Andy Starnes, CPA and Chris Arnone, CPA
Disclaimer: This information was correct at the time of publication however, new guidance from government agencies may be issued at any time, causing some or all of this information to change. Please visit our COVID-19 Business Strategy Hub for the latest news and ensure you are to receive email alerts as they are released. We are working diligently to provide the most current information as it becomes available under our COVID-19 Actionable Insights For Businesses Series.
On May 4, 2021, the U.S. Small Business Administration announced it has officially exhausted Paycheck Protection Program funds for most lenders. The SBA began notifying trade associations that it is no longer accepting applications for new PPP loans from most lenders. This announcement comes a full month before the $292 billion programs application deadline.
As of May 2, 2021, CFIs have approved more than $19 billion across 748,581 loans during the second round of the PPP, with an average loan size of $25,614. Overall the SBA approved more than 5.6 million PPP loans totaling more than $258 billion since the programs reopening on January 11, 2021. First-draw PPP loans accounted for $57.3 billion, and second-draw loans totaled nearly $201 billion.
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Lendios Role In The Paycheck Protection Program
In support of the PPP, Lendio quickly transformed its operations to help small businesses with PPP funding, adding more than 500 new team members to support the effort.
Lendios involvement in PPP:
- More than 200,000 PPP loans facilitated
- $10+ billion in PPP loan dollars
- 2.8 million U.S. jobs impacted
- Average PPP loan size: $52,000
Ppp Extension Act Of 2021
On March 11, 2021, the bill, H.R. 1799 PPP Extension Act of 2021, was introduced in House of Representatives during the 117th Congress. The bill extends the covered period of the Paycheck Protection Program from March 31, 2021, to June 30, 2021, by amending the Small Business Act and CARES Act. It passed the House on March 16, 2021, in a bipartisan vote . It passed the Senate on March 25, 2021, in an also bipartisan vote . The following day on March 26, it was signed into law by President Joe Biden.
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What If The Cdfis Or Mdis In My Area Are Not Participating In Ppp
While a part of the second round of PPP money was set aside exclusively for CDFIs and MDIs to reach underserved small business owners, your Local CDFI or MDI may have exhausted the amount allocated to them for PPP or arent participants.
However, the 2021 Consolidated Appropriations Act appropriated additional funding for low-income communities, such as the Economic Injury Disaster Loan .
With the EIDL loan, you could receive up to $150,000 with restricted usage for working capital. Repayment terms depend on the businesss ability to repay with a maximum repayment term of 30 years.
The Small Business Administration also offers a microfinance loan program for loan amounts up to $350,000.
CDFIs or MDIs may have access to other types of funding so your business can continue to operate.
Other options for people that didnt qualify for an SBA coronavirus loan
Get Connected With Banks Through A Loan Matchmaker
If youre not a current customer of a bank thats participating in Round 2 of PPP, you may rightfully worry about where your application will land in the queue. One way to hedge your bets is to use a loan aggregator to push your application to one of the many lenders that make up its partner base. Fintechs accounted for the third most PPP loans in Round 1, just behind credit unions. These companies generally pride themselves on making applications as easy as possible and, since this is a regulated SBA program, most of the cautions that we would normally issue around using a fintech lender do not apply here.
Some aggregator options include:
Since were talking about an SBA program, wed be remiss if we didnt mention SmartBiz. As an aggregator that, in normal times, specializes in hooking applicants up to qualified SBA lenders, SmartBiz has a lot of practice navigating the SBA bureaucracy and doing as much of the application heavy lifting as possible.
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