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The Small Business Administration announced on Thursday, April 16th all federal funds set aside for the Paycheck Protection Plan (PPP) Loans have been allocated to those business owners who were persistent (and fortunate) enough to get through the application process and receive an official registration number from the SBA via its bank.

In simple terms, the PPP Loans are out of money to assist business owners.

On April 3rd, the PPP Loan application process was opened by the SBA and in less than two weeks no less than $349B was committed to be delivered to small business owners to assist them

For those business owners who have received (or will be receiving) their PPP Loan proceeds, their attention is now shifting to understanding how to apply for the loan forgiveness.  At this point in time, there is very little guidance on exactly what the SBA and the banks that have lent the PPP Loan funds will be looking for.  As this information is released by the SBA and lending institutions, another post will be added to the site to help business owners prepare.

According to the SBA, when it met its $349B lending limit on Thursday, 1.6 million small business owners received the SBA’s loan commitment registration number.  With more than 30 million small businesses in America, the $349B cap leaves a very wide gap between those businesses that will receive financial help to meet payroll over the next two months and those without a financial lifeline.

So, if your business is in the majority, what do you do now?

4 Steps to Take Now if Your Business Did Not Receive a PPP Loan

1. Call your U.S. House of Representative and voice your concerns and insist they take care of those business owners who are struggling to stay in business. Here’s where you may find your Representative.
2. If you’ve submitted your application through your business bank, confirm its status. Ask them if it’s been submitted to the SBA and if so, has an SBA registration number been issued. If so, your loan is earmarked for funding already and your bank should be initiating the loan’s promissory note soon.
3. If you have not submitted your application yet, prepare all required documents to do so and find a bank that is still accepting applications. That’s not easy to do as many of the banks have simply stopped taking the applications. That said, if congress extends the PPP Loan funding beyond its initial $349B, you will be ready to apply.

Here’s what you need to gather:

  • Last 12 months payroll reports showing the gross payroll for every employee
  • Federal Form 941 reports for the last four quarters
  • Paid Group Health Insurance Premium Invoices
  • Paid Retirement Fund payments the business made for the employees (do not count the amounts withheld from employees’ payroll checks, only count the amounts the business paid.
  • If self-employed and you report your income on a Federal Schedule C, find that tax form for 2019.  It will be the basis of calculating your average payroll costs for the PPP Loan application.

    Unfortunately, every lending institution has its own way of gathering the documents its requiring to process applications for the PPP Loans, so be mindful of this fact.  And going into it with a good healthy serving of patience will be helpful.

4. If your business bank is either not an authorized SBA Lender or has shut down its PPP Loan application processing, find another bank. Start with the bank you bank with personally.  Call them and explain the situation.  Many of the smaller, community banks are eager to work with business owners at this time of crisis in order to grow their market share.

It’s not clear if Congress will approve additional funds for the PPP Loans.  If so, the same crazy application frenzy will repeat.  Next time around, don’t be caught flatfooted.  Prepare now.

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PPP Loans Out of Money -- What To Do Now?
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PPP Loans Out of Money -- What To Do Now?
Learn what to do if your business did not receive an approved Paycheck Protection Program Loan from the Small Business Administration. Take these 4 steps now to be prepared if additional funds are approved by Congress.
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