The CARES Act was signed into law on March 27, and swiftly distributed all $350 billion of funding allocated to the Paycheck Protection Program within a couple short weeks. With many small businesses left without funding, the second round of relief is critical to keep many small businesses afloat.
More relief is on the way. Today, President Donald Trump signed the fourth coronavirus relief bill into law. The bill includes expanded funding for small businesses and hospitals, and money for coronavirus testing, allocating an additional $320 billion for the PPP and about $60 billion to the Economic Injury Disaster Loan program.
What happened in round one?
Businesses had little guidance and many questions during round one. Banks’ processes varied making it difficult to anticipate the application processes, when applications would open, what was needed to apply and when businesses could receive funding.
According to CNBC, about 70% of small business owners tried to apply for PPP loans and about half filed for EIDL assistance. Of those that applied, about 20% reported that their PPP loan had been approved and funds deposited as of April 17, and about 10% reported receiving EIDL funds.
How to prepare for round two
As we go into round two, we have more answers and businesses can better prepare for when more funds are available and applications are accepted again. For those who have yet to apply, we strongly encourage businesses to get all information ready. Round two is expected to go even quicker than round one.
We’ve worked with a variety of banks and here’s what you typically need to apply:
- Articles of Incorporation
- Average monthly payroll costs – check out our calculator!
- 2019 tax returns, as well as previous two years if available
- Proof of mortgage or rent, mortgage interest, and utility expenses
- Proof your business is active and in good standing
- Documentation of how the coronavirus pandemic has negatively impacted your business
- Completed SBA’s PPP application form
For those who have already submitted your application but did not make the cut for round one, you should reach out to current lender ASAP. If you are not able to connect, you should see if another lender is willing to take your application.
Please lean on our Coronavirus Crisis Team for any questions regarding the PPP.