While applying for a PPP loan to support a business, it is crucial to know the rules and process of a PPP loan application to make the entire process smooth and stress-free.
U.S. Small Business Administration (SBA) offers PPP loans established by community financial institutions, such as CDCs, SBA Microlenders, CDFIs, and MDIs, till May 31, 2021, or till the remaining funds get exhausted.
The Consolidated Appropriations Act (the Act) passes all changes for a PPP loan.
The PPP loan encourages more businesses to avail the benefits of funding.
First Draw PPP Loan
The businesses may be eligible for this type of loan if they have not yet received PPP funding.
Certain types of entities are eligible for PPP loans, so you must check whether your business meets the eligibility criteria.
Second Draw PPP Loan
Your business must have 300 or fewer employees to qualify for Second Draw PPP Loan.
Borrowers may also be eligible for PPP Forgiveness. You can apply for PPP loan forgiveness within ten months of the end of the loan window. You can submit an application and essential documents electronically.
Application Process Of PPP Loan
Determine your suitability for First or Second Draw PPP Loan
Some businesses are allowed to apply for Second Draw PPP Loan even after receiving First Draw PPP Loan.
The most crucial point is understanding whether you are eligible for a First or Second Draw PPP Loan.
Calculate Maximum Loan Amount
The new guidance from SBA helps in calculating payroll costs and in determining the maximum PPP loan amount.
The calculation procedure depends on the type of business you have and the number of employees.
Collect Appropriate Documentation
Besides providing new guidance, SBA also provides the types of documentation a business needs to support its PPP loan application.
Both loan types require different documentation. So, you must collect the appropriate documentation based on what kind of PPP loan is applied.
Identify A Participating PPP Lender
Lastly, you require finding a participating PPP lender through whom you can apply for a PPP loan.
LenderMatch is the SBA tool, and It provides the data to connect you with reputable lenders offering to fund.
If you want to know more about a PPP loan or wish to apply for it, you can take the help of a professional to complete the PPP loan application accurately. Offloading this task to a reliable expert allows you to focus on other activities of your business.