The Second Round Of Paycheck Protection Program (PPP) Funding Has Been Announced [UPDATE: It’s Passed]
On April 24, 2020, President Trump signed a bill that, among other things, authorizes the addition of $310 billion in funding to the Paycheck Protection Program (PPP), which offers forgivable loans to businesses affected by the devastating COVID-19 outbreak. This comes after the initial $349 billion allocated for PPP Loans ran out in less than two weeks due to the overwhelming demand. Though the bill has now been signed into law, it may be another day or so before the SBA can reopen the program to new applicants, and much (if not all) of the funding is expected to go to the backlog of businesses that applied for PPP funding after the previous aid package passed but whose funding requests were not fulfilled because the initial $349 billion in funding ran dry.
The PPP was a major component of the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), which was signed into law on March 27, 2020. PPP Loans are designed to protect payroll — if you use the loan on operational costs (payroll costs come first) during the eight weeks after the National Emergency was declared, some of your loan proceeds may be forgiven. To this end, you’ll need to follow the guidelines outlined in the CARES Act when using your loan funds.
Paycheck Protection Program Second Funding Round FAQ
If I applied for the first round of funding, am I still in the running to get a loan? Do I need to reapply?
Yes, you are still in the queue to get a PPP loan, and according to the Wall Street Journal, no, you do not have to apply again if your application didn’t get approved in the first round of funding. If you’re unsure, you can check with your lender to make sure that your initial application contained all the required information.
I haven’t applied yet. Is it still possible for me to get a loan?
Unfortunately, experts are projecting that all the funding from this round will be claimed by applicants already in the pool. However, we recommend that you apply just in case. At the very least, this will ensure that if additional funding rounds are approved in the future, your application will be in the queue.
What about the Economic Injury Disaster Loan (EIDL) program? Will it be reopening?
Regrettably, there is no word at this time regarding the status of the EIDL program reopening. However, we will continue to monitor the situation and keep you updated as soon as there are any developments. The new coronavirus relief package did include additional funds earmarked for EIDL as well as PPP; in response, the SBA did resume processing EIDL applications already in the queue, but still remains closed for new applications.
Where You Can Apply For A Paycheck Protection Program Loan
Currently, there are over 1,800 banks and lenders preapproved with the SBA to participate in the PPP loan program. These sources of funding include banks (both large and small), credit unions, online lenders, and loan matchmakers.
Based on reports from business owners who applied for PPP Loans during the last period in which funding was available, you may have more success applying for a loan through a smaller community bank or credit union rather than a big bank. In any case, you may want to start by applying with the financial institution you already use, as that may cut some steps out of the process. Even if they don’t offer PPP Loans themselves, they should be able to point you in the right direction.
One helpful resource in locating PPP lenders is the SBA’s Lender Match tool. The tool can help match your business with a PPP lender, either online or in your locality.
Again, for small business owners, our article that explains PPP Loans has some helpful information about who qualifies for a PPP Loan and how/where you can apply for such a loan. For the self-employed, however, the process is a bit different. Check out our article on applying for a PPP Loan as a contractor or freelancer for more details on the information you’ll need to provide.
Paycheck Protection Program Resources & FAQs For Small Businesses
This has been a tremendously stressful time for all of us. Unfortunately, small business owners and the self-employed have faced particular challenges and frustrations, as many were unable to get a PPP Loan during the last round of funding despite applying as soon as the funds became available. Many were not even able to determine the status of their loan application. Right now, things simply aren’t working as they should, compounding what is already a tragic era in our history.
Here at Merchant Maverick, we’ve heard your harrowing stories, and we understand your anger. Just know that we’re going to continue to help in whatever way we can as we all navigate this unprecedented time. You’re not giving up, so neither will we.
For more information on PPP Loans, how to apply for them, and how to check the status of your PPP Loan application, check out the following resources:
- SBA Paycheck Protection Program (PPP) Loans Explained: How They Work, Who Qualifies & Where To Apply
- How To Apply For A Paycheck Protection Program (PPP) Loan For Coronavirus Relief
- How To Check The Status Of Your SBA Paycheck Protection Program (PPP) Loan Application
Also, check out our COVID-19 hub for more information about how to weather this disaster intact. You can also explore our small business reviews to find additional funding options. Now, let’s keep fighting the good fight.