JACKSONVILLE, Fla. – Another $310 billion is being added to the federal government’s Paycheck Protection Program so that lenders can offer more forgivable loans to small businesses.
The loan program -- which the Small Business Administration had to shut down on April 16 when the first $349 billion tranche ran dry in less than two weeks -- opened again at 10:30 a.m. Monday.
The second round of money is expected to go quickly. Bank of America reports they have $50 billion worth of applications ready to go through the second round. JPMorgan Chase also says they have 150,000 applications ready to process. So, unless your application is already in at one of the larger banks like Chase or Wells Fargo, you’re going to want to check out some alternative options.
“The PPP is really for the employees and that’s what we’re really focused on," said Allan DeVault, managing partner of Black Sheep, Bellwether and Orsay restaurants.
The loans, which are part of the government’s coronavirus relief package, don’t have to be paid back if they’re immediately used to meet pre-crisis payroll expenses.
There was outrage that some public companies got loans, such as Ruth’s Chris, Auto Nation and Shake Shack. While those businesses and others have said they will return the money, the new round of funding includes provisions to make sure that doesn’t happen again.
The new round of funding sets aside $60 billion for small- and medium-sized community banks, credit unions and less traditional lending companies that are SBA-approved.
And if you’re application is not already in with one of the major banks, you’re going to want to look at those other SBA-approved options. For example, BlueVine, Centerstone SBA Lending, Funding Circle, even PayPal are all accepting applications for PPP loans.
Another option is to go straight to the source. On the SBA website, there is a page dedicated to showing you SBA-approved PPP lenders just by entering your ZIP code.
No matter where you decide to apply, the most important piece of advice is to not wait around. This round of funding is less than went out the first time, and you don’t want to get left behind.
It’s also worth noting technical issues plagued the second round of emergency funding for small businesses that opened Monday, with users reporting error messages and slow processing. The problems mirrored the initial rollout of the PPP earlier this month, which was troubled by technical hiccups and questions about if lenders were prioritizing the businesses that needed the money most.