New PPP Application Rules Are Released

ppp Jan 07, 2021

Updated Friday January 8, 2021 at 8pm EST

Paycheck Protection Program applications will be available next week. Most EIDL grant and loan applicants will also be able to apply for PPP this time, pending final rules. Here's how to prepare:

👉🏻Add the PPP Tracker on the Badges Screen on Skip App

On the PPP Tracker you can also read more information about how to prepare, as well as read below on this page.

More PPP Information

Late Wednesday the Small Business Administration (SBA) released their new Paycheck Protection Program (PPP) Round 2 Application rules. Essentially these rules amend and clarify rules from the first PPP round. We expect banks and lenders to start accepting new PPP applications in the coming days as a result of this new guidance. Here's what you need to know.

What Do You Need to Know For the PPP Round 2?

As of writing this post, banks or lenders are not accepting new applications yet. We will try to keep this post updated, or you can check directly on our PPP tracker on the Skip app. You can also quickly see how much you're eligible for on the Skip app.

First, how does the loan process work.

Second, you should understand if you qualify.

Third, you should think about which lenders to apply to.

Fourth, you should understand how this impacts EIDL grants

Fifth, you should understand forgiveness.

We'll cover all this below.

How Does The PPP Forgivable Loan Process Work?

The PPP program was first started from the Cares Act in March 2020 to provide forgivable loans to small businesses to help in response to the pandemic. With the new bill, there is the opportunity to apply for a second PPP round through an SBA-approved lender.

Millions of businesses took advantage of these forgivable loans by applying through lenders and banks to get this funding. Over 2,000 banks and lenders participated in the program.

Basically, the process is this:

  1. The SBA sends rules to the banks and lenders
  2. Banks have online forms for small businesses or sole proprietors to apply
  3. Banks review applications and if you qualify, they will seek final approval from the SBA
  4. The SBA will ensure the application is correct and you haven't already received PPP funding from another bank
  5. The bank will approve you, have you sign documents, and they'll wire you the money

Do you Qualify for a Second PPP Loan?

If you have less than 300 employees and your revenue declined by 25% or more from a quarter in 2020 versus 2019. There are other rules as well you'll need to know but there are some of the basics. We cover more on the PPP round 2 here.

What PPP Lenders Should You Apply For?

Many banks had a requirement that you had to have an existing relationship with them in order to apply for a PPP through them.

However, some lenders, especially fintech companies, did not have this requirement. There technology allowed for them to evaluate risk and fraud potential and this, approve new borrowers.

There are countless banks and lenders that you could apply through, however we have recommended lenders. These are lenders that:

  1. Don't require you to have an existing relationship with them
  2. Have generally had fast turn-around times in round 1
  3. Had good reviews and support in round 1, based on feedback

We will be listing these lenders on our PPP Tracker page on the Skip App as soon as applications go live. However, it is up to the lender or bank to approve you. Not every business or individual that applies will be approved.

How Do PPP Loans Impact EIDL Grants?

In the first round, borrowers had to deduct EIDL Advances (aka Grants) from their PPP forgiveness amount. Now you don't have to. This is especially good for independent contractors or self-employed individuals. In the past, it often didn't make sense to apply for both, because the additional PPP amount may have been negligible.

How Does Forgiveness Work with PPP Loans?

In most cases, your bank or lenders will submit the PPP forgiveness application directly to the SBA. Your bank or lender will have more information about this. The SBA has up to 90 days to decide on forgiveness but in many cases this has been extended.

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