PPP loans are a great way to get your business started. Here’s how to get a PPP loan to start your business.
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What is a PPP Loan?
The government’s Paycheck Protection Program (PPP) created a loan designed to help small businesses keep their employees on the payroll during the coronavirus pandemic. The PPP loan is part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), which was passed by Congress and signed into law by President Donald Trump on March 27, 2020.
The PPP loan is 100% federally guaranteed and can be used for payroll costs, rent, utilities and interest on other debts. The loan is forgiven if businesses maintain their payrolls during the eight-week period after the loan is made and use at least 75% of the loan for payroll. Forgiveness is not guaranteed, however, and businesses will need to submit documentation to their lender to prove that they complied with the terms of the loan.
Businesses can apply for a PPP loan through any Small Business Administration (SBA)-approved bank or lender. The SBA has a list of participating lenders on its website.
How to Get a PPP Loan
The first step in getting a PPP loan is to find a lender that is participating in the program. Once you have found a participating lender, you will need to fill out a loan application and provide some documentation. The lender will then review your application and determine if you are eligible for the loan.
Find a Lender
The first step in getting a PPP loan is to find a lender. You can use the Small Business Administration’s (SBA) Loan Matching Tool to find lenders in your area that are approved to participate in the Paycheck Protection Program.
Once you’ve found a lender, you’ll need to complete an application and submit it to the lender. The application requires basic information about your business, such as your business name, address, and contact information. You’ll also need to provide information about your business finances, such as your revenue and expenses.
If you’re approved for a PPP loan, the lender will disburse the funds to you. The SBA recommends that you use the funds for payroll costs, rent, mortgage interest, or utilities.
Apply for the Loan
There are a few different ways to apply for a PPP loan. You can either apply through your local bank or credit union, through an online lender, or directly through the Small Business Administration (SBA).
If you’re applying through your local bank or credit union, you will need to fill out a loan application and provide documentation of your business finances, such as your tax returns, profit and loss statement, and balance sheet.
If you’re applying online, the process is similar – you will need to fill out a loan application and provide documentation of your business finances. However, some online lenders may also require additional information, such as your business license and articles of incorporation.
Applying directly through the SBA is a bit different. Instead of filling out a loan application, you will need to fill out the SBA’s PPP forgiveness application. This form is used to determine how much of the loan will be forgiven. You will also need to provide documentation of your business expenses for the covered period (the 8-week period after you receive the loan).
Use the Loan
You can use the loan for:
-Interest on other debt obligations incurred before February 15, 2020
-Payroll costs, including:
-Salary, wages, commissions, or similar compensation;
-Payments of cash tips or equivalent;
-Employee group health care benefits, including insurance premiums;
-Retirement benefits; and
-State and local taxes assessed on employee compensation
What to Do if You Can’t Get a PPP Loan
The Paycheck Protection Program (PPP) loan is a government-backed loan that helps small businesses stay afloat during times of crisis, such as the COVID-19 pandemic. If you’re a small business owner who has been affected by the pandemic, you may be wondering how to get a PPP loan. Unfortunately, not all small businesses will be able to get a PPP loan. In this article, we’ll tell you what to do if you can’t get a PPP loan.
Consider Other Loans
If you can’t get a PPP loan, there are other types of loans that can help you start or grow your small business. The Small Business Administration (SBA) offers several different loan programs, each with its own eligibility requirements and terms.
The 7(a) Loan Program is the SBA’s most popular program. It offers loans of up to $5 million for businesses with strong credit and a demonstrated ability to repay the debt. The 7(a) program can be used for a variety of purposes, including working capital, equipment purchases, and real estate acquisitions.
The 504 Loan Program provides long-term, fixed-rate financing for major business equipment and real estate purchases. Loans can be up to $5 million, with terms of 10, 20, or 25 years. This program is geared toward businesses that need to make large capital expenditures but may not have the collateral or credit history required for a traditional bank loan.
The Microloan Program offers small loans of up to $50,000 to help businesses start up or expand. Loans are made through intermediary lenders in your community who work with the SBA to provide financing to small businesses.
If you’re having trouble getting a traditional bank loan, you may want to consider a microloan. These are small loans that can be used for a variety of purposes, including working capital, inventory or equipment purchases, or business expansion. Microloans are made through intermediary lenders in your community who work with the Small Business Administration (SBA) to provide financing to small businesses.
The SBA also offers disaster loans to businesses of all sizes that have been affected by declared disasters. Disaster loans can be used for repairs or replacement of damaged property, equipment, inventory, or business assets.
Consider Government Grants
If you’re having trouble getting a PPP loan, there are other government programs that can help you get funding for your business. The Small Business Administration (SBA) offers a variety of grants for small businesses, including grants for women- and minority-owned businesses, disaster relief, and research and development.
The SBA also offers low-interest loans for businesses in certain industries, such as agriculture, healthcare, and manufacturing. These loans are typically for larger amounts than PPP loans, and they may have stricter requirements, such as collateral.
You can also look into state and local programs that offer funding for small businesses. Many states have programs that provide low-interest loans or grants to businesses in specific industries or that are located in disadvantaged areas. Check with your state’s economic development office to see if there are any programs that could help you.
Consider Private Investors
If you’re having trouble getting a PPP loan, you may want to consider seeking out private investors. This is especially true if you’re starting a business, as they may be more likely to invest in a new business than an established one.
There are a few things to keep in mind if you go this route:
-You’ll need to sell equity in your business in order to raise capital. This means giving up some control of your company.
-You’ll need to have a solid business plan and pitch in order to convince investors to invest in your company.
-You may have to give up some of the profits of your company in order to pay back investors.
If you’re considering seeking out private investors, be sure to do your research and understand the risks involved before making any decisions.