How Do I Apply for PPP Loans?

By Kieran Daly, 18 January, 2023

How Do I Apply for PPP Loans?

Unfortunately, applications for Paycheck Protection Program (PPP) loans are no longer being accepted as the program ended on May 31, 2021, per the U.S. Small Business Administration (SBA). Businesses that were approved for these small business loans can now apply to have these forgiven, or they are scheduled to soon start, if not currently, making repayments.

If you have one of these PPP small business loans, you’ll want to make sure you understand the forgiveness requirements and the timing of when to apply. 

Can I Still Apply for a PPP Loan After the Deadline?

No, you cannot apply for a PPP loan after the May 31, 2021 deadline. If you have a PPP loan, you may still be eligible to apply for forgiveness. Currently, there are no signs of the PPP returning in the near future, although this could certainly change. 

Is It Too Late to Apply for PPP Loan Forgiveness?

According to the SBA, PPP loan borrowers can submit applications for forgiveness at any time up to the loan’s maturity date (i.e., the date the final loan payment is due). To be eligible for both First and Second Draw PPP loan forgiveness, you must have completed the following in the 8- to 24-week covered period after receiving your loan disbursement:

  • Maintained employee and compensation levels

  • Spent loan proceeds on payroll costs and other eligible expenses

  • Spent at least 60% of the loan proceeds on payroll costs

Keep in mind that the SBA stops deferring PPP loan payments 10 months after the last day of your covered period. So if you chose a 24-week covered period, your payments would begin approximately 16 months after disbursement if your loan has not been forgiven.

How Do I Check My SBA PPP Loan Forgiveness Status?

To check the status of your SBA PPP loan forgiveness application, either contact your lender directly or log on to the SBAPPP loan forgiveness portal. The portal is only available to borrowers whose lenders are participating in direct forgiveness (you can find a PPP loan list of participating lenders here). If your lender is not participating, then you will have to contact them directly for a PPP loan update about your forgiveness status.    

Thankfully, the last PPP loan metric report published by the SBA near the end of 2022 shows that:

  • 93% of all PPP loans have forgiveness applications submissions

  • 93% of all PPP loans have been fully or partially forgiven

So if you’ve met the requirements, chances are high that your PPP loan will be forgiven.

What Are Alternatives to a PPP Loan?

Research by McKinsey indicates that pandemic-related recovery time could take more than five years for some of the most affected businesses. So if your business is still healing from the chaos of COVID-19, you are not alone. For those who could use a financial boost, check out these popular PPP loan alternatives:

  • SBA 7(a) Loan - You can borrow up to $5 million with a 7(a) loan. Borrowers use this loan for short- and long-term working capital, buying real estate, refinancing, or purchasing supplies.

  • SBA 504/CDC Loan - The 504 loan cannot be used for working capital, refinancing, or rental real estate. Instead, it is for purchasing major fixed assets that support business growth, like new facilities, existing buildings, or heavy-duty machinery. 504 loans have a fixed interest rate, while the 7(a) loan usually comes with a variable rate.

  • SBA Microloans - SBA microloans are designed for the start-up crowd, and the average microloan is around $13,000. Borrowers can use these funds for working capital, supplies, and machinery, but these loans cannot be used to buy real estate or pay existing debts.

  • Grants - Researching and applying for business grants takes serious time and effort. A quick Google search of “small business grants” will show you all that is available on a federal, state, and private level. GrantWatch estimates that grant application processing can take anywhere from 30 days to 18 months. So if you go this route, consider putting some of your eggs in other baskets. 

  • Venture Capital - The term “venture capital” refers to investments in a business with a substantial level of risk, like start-ups or businesses in an expansion phase. This funding comes from venture capital firms or individual investors. Venture capital can be tricky, as the investor will usually want some kind of control or decision-making power in your business. 

  • Business Loans and Lines of Credit - You can get a business loan or line of credit through banks, credit unions, and online lenders. Banks and credit unions tend to have stricter loan requirements than online lenders, so keep that in mind as you weigh your options.

For the fastest and easiest way to fund your business, check out Backd. With Backd, you can access up to $2 million at industry-leading rates with uniquely tailored terms to fit your business needs. Financing products include:

  • Working Capital - You can borrow between $25 thousand and $2 million for terms of up to 16 months—no collateral required.

  • Line of Credit - You can borrow between $50 thousand and $750 thousand and draw funds any time, all with a soft credit pull. 

To get started, submit an application online. Once you’ve been approved, you’ll receive your funding in less than 24 hours. If you’d prefer to speak with a Backd team member before starting, contact us for answers to all your questions.