Despite the initial hiccups, the PPP program is sailing smoothly.
With over $100 billion available in loans, business owners still have the opportunity to protect their employees’ payroll. Although not an incredibly arduous process, it’s one you want to get right the first time, ensuring you get the funds you need ASAP. That’s why we’ve put together a guide on how to take advantage of the PPP funds still available. Check them out below:
Find a great lender.
A big reason why a lot of small businesses had such a hard time with PPP loans is the types of lenders they were going after. In April, the ‘big four’ consisting of Bank of America, Wells Fargo, JP Morgan Chase, and US Bank were hit with a lawsuit accusing them of favoring bigger customers first in processing PPP applications. This led a lot of small businesses scrambling to find a more community-oriented bank, such as a small to mid-size bank or credit union. If you’re still struggling to find a lender, then these places are a good start, as well as within your network.
As a small business owner, it’s smart to start chatting with the other entrepreneurs you know over who they borrowed from for their PPP loans. This will give you a list of lenders that might be available through your network, highlighting the relationships you’ve already built. That familiarity will help but don’t forget to shop around and look into the finer details of the loan. Although all the qualifications for forgiveness are the same, how the bank deals with the loan might differ, which is why you should do your research on which deal is best for you.
Get all your ducks in a row.
Once you’ve found a lender you like, it’s time to compile everything you can for them to look over. The more documentation you have for payroll, the better, because although PPP loans also cover other expenses such as rent, the primary role of them is to supplement your employee’s well-being. Don’t be afraid to include contractors or outside help as well, mapping out all your expenses in one place.
Take your time, and don’t forget to explore other options in the event you get denied.
Go over how you look on paper.
With an accurate picture of where your finances are at regarding your PPP application, it’s not a bad idea to have a third party look over how you look on paper. This can help with making adjustments to maximize your PPP loan amount, ensuring your staff is covered for the long-haul. Remember, these loans are forgivable, so it’s better to be protective in asking for more than trying to hope you get approved by asking for less. In fact, most lenders prefer to look at it from the ROI they’re receiving for the size of the loan, where a larger loan can actually help quite a bit.
Prepare for the waiting period.
Once you’ve got your loan application in, be prepared to wait. Although funds are available, there’s a lot of people still vying for them. While not all of the applications will make it through (mainly because they asked for too little), ensuring your loan will stand as competitive amongst the rest will make this patient process a little more bearable. Take your time, and don’t forget to explore other options in the event you get denied.
Follow the terms of the loan very closely.
Upon approval, you need to make sure you’re following the loan terms to a T. While PPP loans are forgivable, they also require you to follow certain guidelines on interest and repayment. Pay attention to these, as they’re ultimately what makes the loan worth it. Without them, you might end up paying quite a bit back for money that otherwise could have been essentially free.
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