I’ve applied for PPP. Now what?
When the Paycheck Protection Program was first announced, small business owners scrambled to apply for the government-guaranteed, forgivable loans. But now — even as applications are successfully flowing to lenders working with the U.S. Small Business Administration — there are still questions.
It isn’t yet entirely clear how the money in the $349 billion program, which Treasury Secretary Steven Mnuchin has asked Congress to increase by $250 billion, will actually reach the hands of small business owners.
Here’s what we know so far about what happens after you’ve applied.
Has anyone gotten money from PPP yet?
As of April 8, the SBA confirmed to CBS News it had originated over 100,000 loans worth $30 billion. But, most banks are waiting on final closing documents from the SBA so they can fund the approved loans. By law, banks must make these disbursements within 10 days of approval.
I’ve submitted an application at my bank. How will I know if I’ve been approved?
The lender will reach out to you with next steps, and you’ll be asked to confirm the documents you’ve submitted and sign an agreement for the loan. This is a legally binding contract, so be sure to run it past a lawyer or attorney if you can.
Can I apply at two banks, just in case?
No. If you’ve submitted or signed formal paperwork at an SBA lender — accepting the PPP loan and its terms — you can not re-apply at an additional lender.
However, filing pre-applications at multiple institutions is allowed. Submitting informal information like your name, email, phone number, and business information is fine to do at multiple lenders (effectively just getting your name in the queue.) If a lender begins to process your application, however, you’ll need to communicate that change to the other places you’ve pre-applied.
When will I get funds?
The timing between application submission and lender approval varies by lender; however, once the loan is approved, the lender is required to make the first disbursement of the loan no later than ten calendar days from the date of loan approval.
If you’ve submitted an application and been confirmed for a PPP loan at an SBA lender, expect communications from them about when the loan will be dispersed.
I had to lay off my employees, do I need to hire them back?
Yes. After receiving the PPP loan, you have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.
My bank has accepted and confirmed my application for PPP. When and how can I apply for forgiveness?
The lender is required to make a decision on forgiveness within 60 days from the day you submit your forgiveness request and supporting documents.
You’ll need to prove that the PPP loan amount was used appropriately in the allotted 8-week time period after you received the loan — with 75% used for qualifying payroll costs and 25% used for business expenses like rent and utilities. It isn’t yet clear what documentation will be required to prove you’ve followed this protocol. Check back here for frequent updates, and in the meantime, retain as much proof and documentation as possible.
Do I need to do anything differently after I receive PPP funds?
Not necessarily, if you’re following the program guidelines. However, it’s highly encouraged that you document as much as possible with regards to how you’re spending the proceeds, as you’ll need to prove that you spent them on payroll and qualified expenses. If you don’t use a payroll processor, be sure to keep diligent records of what you paid to whom, and make sure you file your quarterly payroll taxes on time.
For more information about the requirements to properly spend PPP, check out our FAQ here.
At Rho Business Banking, we’re working to connect small businesses with the lenders who can help them the quickest. We’ve received tens of millions of dollars in loan pre-applications from hundreds of small businesses across the country. Looking to connect with an SBA lender? Pre-apply with Rho here.
