Many have questions concerning what exactly is going on with the Paycheck Protection Program as it stands now. While there have been issues in the initial phases of the program, Congress has tried to address some of these in the second round of funding. Below are a few of the more frequently asked questions regarding the PPP and small businesses.
Is there still time to apply for the PPP?
Yes, Yes, the SBA has said that in the second round of funding thus far 187 billion in loans has been approved—they authorized 310 billion. The average loan size was right around 70k. All told, there is just over 120 billion in loan funds remaining.
Generally, how long does it take to get the money once the application is approved?
Because of the onslaught of applications, the process is taking a bit longer than expected. Typically, loan applicants on average are waiting between one and three weeks to receive their funding.
How many lenders can I apply for a PPP loan?
You can apply to multiple lenders; however, you can only get one loan per federal Tax ID/Social Security number. Some lenders may have restrictions in place regarding applying to multiple institutions. You must check with the individual lender.
What documentation is required for the loan?
Each lender has specific guidelines in tandem with those set out by the SBA. You need to be able to show that your business has been affected by COVID-19. Also be prepared to show such items as articles of incorporation, tax returns, bank statements, as well as any 1099 information, among other such pieces.
Can PPP money intermingle with money from my regular business account?
There are no set rules in place regarding intermingling cash for your business. However, if you are applying for forgiveness, it makes sense to establish a separate account for the PPP funds; this simply makes an easier trail to follow when applying for forgiveness.
When does the eight-weeks start as far as forgiveness?
Once you receive the money in your account, the clock on the eight weeks starts.
What happens if I receive PPP money but still cannot open because of state-mandated restrictions?
Talk to your lender. They may be able to push back the funding for a bit. The other thing you can do is to return the money as you may not be able to get forgiveness.
What happens if a company doesn't receive full forgiveness under PPP?
Same as a business loan, you will be required to pay back whatever amount was not forgiven under the program guidelines. The balance is due 2 years from the date of funding and the interest rate is 1%. The first payment will be due 6 months from the start date of funding.
How many employees do I have to hire back to get forgiveness?
That is one of the issues with the program. This remains somewhat vague to date. To be safe, plan on rehiring all full-time employees that you used in determining the loan amount. In other words, their compensation and headcount levels that enabled you to calculate the amount needed.
While there may still be some things that need to be sorted out, money is available in this second wave of PPP funding. First Union Lending can help. We are here to get your small business access to the PPP funds that you may need to survive. Call today and let's get started on your application.