How to Get Approved for a PPP Loan
Contents
The PPP loan process can be confusing, but we’re here to help. Read our guide on how to get approved for a PPP loan and get the money you need to keep your business afloat.
Checkout this video:
Introduction
The Paycheck Protection Program (PPP) is a loan designed to help small businesses keep their workers on the payroll during the coronavirus (COVID-19) pandemic.
To be eligible for a PPP loan, you must:
-Be a small business with 500 or fewer employees
-Be a business that was in operation on February 15, 2020
-Have incurred economic injury as a result of the coronavirus pandemic
What is a PPP Loan?
A PPP loan is a loan that is guaranteed by the Small Business Administration (SBA). This type of loan is available to small businesses and nonprofit organizations that have been adversely affected by the coronavirus (COVID-19) pandemic.
To be eligible for a PPP loan, you must have been in business on or before February 15, 2020. You must also have experienced a loss of revenue due to the pandemic.
To apply for a PPP loan, you will need to fill out an application and submit it to the SBA. You will also need to provide documentation of your revenue loss. Once your application is approved, you will be able to receive the loan funds.
If you are approved for a PPP loan, you will be required to use the loan funds for eligible expenses such as payroll, rent, utilities, and mortgage payments. You will also be required to repay the loan over a period of two years.
How to Get Approved for a PPP Loan
Before you begin the process of applying for a PPP loan, you should make sure that you are eligible. The first step is to check with your SBA-approved lender. You will need to have a good credit history and be up to date on your taxes. You should also have a business plan ready to show the lender. If you have all of these things in order, you will have a much better chance of getting approved for a PPP loan.
SBA Eligibility Requirements
To be eligible for a PPP loan, you must:
– Have been in business on or before February 15, 2020
– Have paid employs during that time
– Have a certification from a small business development center (SBDC), Women’s Business Development Center (WBDC), Veterans Business Development Center (VBDC), or SCORE chapter indicating that the organization has been adversely affected by the coronavirus
– Declare in good faith that the current economic uncertainty makes the loan necessary to support ongoing operations
Documentation Requirements
In order to get approved for a PPP loan, you will need to provide a number of documents to your lender. The specific documents required will vary depending on the type of business you have, but may include:
-Proof of business existence: This can be in the form of articles of incorporation, business licenses, or tax returns.
-Proof of ownership: This can be in the form of bank statements or stock certificates.
-Detailed list of employees: This should include each employee’s name, address, and Social Security number.
– Payroll records: You will need to provide proof that you have paid your employees, such as pay stubs or bank statements.
– Self-employed individuals: If you are self-employed, you will need to provide documentation such as 1099 forms or tax returns.
Application Process
The process for getting approved for a PPP loan is simple and straightforward. Just follow these four steps:
1. Determine your eligibility
2. Gather the required documents
3. Submit your application
4. Get approved!
Let’s take a closer look at each step:
1. Determine your eligibility: You’ll need to make sure that you meet the basic eligibility requirements set by the government in order to apply for a PPP loan. These requirements include being a small business with fewer than 500 employees, being in operation for at least two years, and having made less than $2 million in annual revenue in 2019.
2. Gather the required documents: Once you’ve determined that you meet the eligibility requirements, you’ll need to gather all of the required documentation for your application. This includes your business tax returns, bank statements, and payroll reports.
3. Submit your application: Once you have all of the required documentation, you can submit your application online or through your local bank or SBA-approved lender. Be sure to include all of the required information and documentation so that your application can be processed quickly and efficiently.
4. Get approved!: After you submit your application, all you have to do is wait for approval. If everything goes smoothly, you should receive approval within 10 days and have access to the funds you need to keep your business running during these difficult times.”
Conclusion
The SBA approves PPP loans through its network of 7,000+ participating lenders. You can find lenders through the SBA lender match tool or through your local chamber of commerce.
To get approved for a PPP loan, you’ll need to complete an SBA loan application and provide your lender with documentation about your business and its finances. Once your application is approved, your lender will disburse the funds to you in one lump sum.
You’ll then have 24 weeks to use the funds for eligible expenses, including payroll, rent, utilities, and mortgage interest. At the end of 24 weeks, you can apply for a loan forgiveness if you’ve used the funds as directed. If you don’t apply for forgiveness, you’ll need to begin making payments on your loan (with interest) starting 10 months after you received the loan funds.
