$349 Billion PPP Funding Limit Reached – Next Steps if You Haven’t Yet Applied

Last updated April 21, 2020

We outlined in a prior post that under the CARES Act, small businesses are eligible to receive up to a $10 million dollar (or 2.5x their average monthly payroll) forgivable loan via the Small Business Administration’s (SBA) Payroll Protection Program (PPP). Allowable uses of the PPP loan funds include:

1. Payroll costs, including benefits
2. Interest on mortgage obligations, incurred before February 15, 2020
3. Rent, under lease agreements in force before February 15, 2020
4. Utilities, for which service began before February 15, 2020.

Unfortunately, as of April 16, 2020, all $349 billion in PPP funds has already been allocated to existing PPP loan applicants. However, Congress is currently discussing allocating an additional $250 billion in funding for the PPP program.

What to do if you have not yet applied for a PPP loan:

In anticipation of Congress approving the additional PPP funding, the SBA is continuing to accept PPP loan applications. However, they cannot guarantee that applicants will receive funds even if additional funds are allocated to the program. Thus, we urge anyone who missed out on the first round of funding to prepare and submit their PPP loan application now in an effort to secure a piece of the additional funding, if/when Congress allocates additional funds.

When to Apply:

If you have not already done so, we recommend that you apply as soon as possible. As was the case with the first round, the second round of funding will be limited and provided on a first-come, first served basis.

Note the initial $349 billion in funding was fully allocated in just 13 days, and some applicants are already in line for the second round, should it be approved.

Where to Apply:

You can apply at any SBA certified lender, a partial list of which are provided here. If you have an existing relationship with one of the lenders, then we recommend starting there. That being said, we have heard that some applicants have had better luck with getting a PPP loan through some smaller banks and credit unions, as well as with some online financial tech lenders like PayPal. Regardless of which lender you decide to go with, we recommend that you begin the process now.  If your lender indicates that the SBA has closed the application process, please direct them to the SBA’s website.

How to Apply:

Each applicant will be required to complete the SBA’s PPP Application Form. In addition, you will need some or all of the following items in order to complete the application process:

1. PPP calculator worksheet
   Request a Paycheck Protection Program calculator worksheet from your preferred lender in order to help you determine your eligible loan amount. This document is required and tends to vary slightly from lender to lender. As an example, the SBA’s interactive PPP loan calculator can be found here.
2. Payroll records
   You will need payroll tax forms (i.e. Forms 940 and/or 941) from January 1, 2019 to the most current filing. Note, you will need to be able to identify any employees who received compensation in excess of $100k per year.
   1. 1099 employees/contractors can still submit an application using their Social Security Number instead of an EIN on their application.
3. Tax returns
   You will need your tax returns and financial statements for the last two years or, if you haven’t been in business that long, all of your tax returns and financial statements for the period that you have been in business.
4. 1099-Misc (if applicable)
   This form if only required if you have filed form 1099-Misc and included contractor compensation as part of your average payroll.
5. Copies of the driver licenses for business owners with ownership stakes of 20% or more.
6. A voided check for the account where the loan will be deposited.
7. The most recent 6 months’ worth of bank statements for the entity applying for the loan.
8. Copy of the applicant’s Articles of Incorporation or Articles of Formation, if applicable.

Note, your lender might require additional documents, so please be sure to confirm with them regarding what documents they require to be submitted.