If your small business is unable to obtain a PPP loan, where should you look?
Other SBA loans and grants from state and local agencies and organizations are available to small business owners.
The Paycheck Protection Program was supposed to cease on May 31, 2021, but it didn't. For additional information, see our PPP page or our PPP Loan Forgiveness Guide.
For businesses that qualify, the Paycheck Protection Program can be a lifeline, but it's not the only option for those coping with the coronavirus pandemic.
Those that do not satisfy the PPP standards may be eligible for grants and other finance, such as state and municipal grants and Small Business Administration loan programs.
Loans and grants from the Small Business Administration
For failing enterprises, the Small Business Administration offers numerous loan options. SBA-backed loans have lower interest rates and more favorable terms than private-lender loans, but applicants must still fulfill minimum credit requirements and may be required to put up collateral.
Disaster Loans for Economic Injuries
These low-interest loans, which were previously only available to enterprises affected by natural disasters, are now available to businesses with up to 500 employees that can demonstrate a financial loss due to the coronavirus pandemic.
Eligible businesses can get up to $150,000 in working capital for up to six months. More than $25,000 in collateral is necessary. Operating expenses, such as fixed debt payments, can be paid with money borrowed through an EIDL. EIDLs are not eligible for loan forgiveness, unlike PPP loans, however payments are suspended for a year.
Microloans and 7(a) loans from the Small Business Administration
The SBA provides a number of alternative loan programs for small-business owners who have been affected by the coronavirus. Your business needs and the specific loan program will determine how much you can borrow and on what circumstances.
Microloans, for example, have a maximum loan amount of $50,000. The maximum size of a standard 7(a) loan is $5 million. SBA Express loans, which are part of the 7(a) program, are ordinarily limited to $350,000, but the Economic Aid Act of late last year increased the maximum to $1 million from January 1 to October 1, 2021. After that, Express loans will have a maximum ceiling of $500,000.
Microloans cannot be used to refinance existing debt, for example, although 7(a) loans can. Working capital can be financed with funds from either loan program.
These loans are not forgiven, but they are repayable.
qualify for the Small Business Administration's debt relief program, which was recently expanded to include coronavirus treatment. On loans approved between February 1 and September 30, 2021, the SBA will cover the first six months of principle and interest.
Operators of Shuttered Venues Receive Grants
Operators of Shuttered Venues Theaters, live music venues, talent agencies, and select museums, zoos, and aquariums that can show a revenue loss of at least 25% are eligible for SBA grants. Some promoters and producers are also eligible.
The SVO grant program is relatively new, and applications are not being accepted at this time. Enterprises that lost at least 90% of their revenue between April and December 2020 will get first dibs on grant awards once the program is open, followed by those that lost at least 70%, and finally all other qualifying businesses. These high-priority groups may be eligible for additional funding.
Qualifying sites are eligible for up to $10 million in funding, though most would receive far less. Depending on when your firm started, the exact amount is depends on sales, which is either 45 percent of 2019 gross income or average monthly gross revenue. The funds can be utilized for operating expenses like as leases and mortgage payments, as well as worker protection, state and local taxes, and debt payments made before February 15, 2020.
Other grant opportunities
For enterprises in need of capital, loans aren't the only choice. Thousands of grants, including those granted by federal, state, and local government entities, are available to qualified small businesses.
Are you unsure where to begin your search for a grant? Try the chamber of commerce, the Small Business Development Center, or the Economic Development Administration office in your area.
Grants.gov and GrantWatch.com are two databases that provide a complete, searchable list of available grants (note: GrantWatch.com keeps grant details behind a paywall).
Most grants have strict guidelines and are generally tailored to a specific objective, geography, business type, or demographic, such as veteran-owned or minority-owned enterprises.
Paycheck Protection Program Review
What is the Paycheck Protection Program?
The Paycheck Protection Program is An S B A backed loan
that helps businesses keep their workforce employed during the COVID-19 crisis.
Notice: The Paycheck Protection Program P P P ended on May 31, 2021.
Existing borrowers may be eligible for PPP loan forgiveness.
S B A also offers additional COVID-19 relief.
PPP loan forgiveness
Borrowers may be eligible for Paycheck Protection Program (PPP) loan forgiveness.
First Draw PPP Loan forgiveness terms
First Draw PPP loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:
Employee and compensation levels are maintained,
The loan proceeds are spent on payroll costs and other eligible expenses, and
At least 60% of the proceeds are spent on payroll costs.
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:
Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan,
The loan proceeds are spent on payroll costs and other eligible expenses, and
At least 60% of the proceeds are spent on payroll costs.
How and when to apply for loan forgiveness
A borrower can apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been used. Borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender.
To apply for loan forgiveness:
1. Determine if your lender is participating in direct forgiveness through SBA and complete the correct form:
Review the list of lenders participating in direct forgiveness to determine whether you must apply via SBA.
For borrowers whose lender is participating in direct forgiveness, you can use our portal to apply after August 4, 2021. Direct forgiveness borrowers must use the SBA forgiveness portal. The questions you will be asked in the portal correspond to those asked on SBA form 3508S.
For borrowers whose lender is not participating, you must apply through your lender. Your lender can provide you with either the SBA Form 3508, SBA Form 3508EZ, SBA Form 3508S, or a lender equivalent. Your lender can provide further guidance on how to submit the application.
2. Compile your documentation:
SBA Form 3508S does not require borrowers to provide additional documentation to show the calculations used to determine their loan forgiveness amount. However, SBA may request information and documents to review those calculations as part of the loan review or audit processes.
Payroll (provide documentation for all payroll periods that overlapped with the Covered Period):
Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees
Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period:
Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state
Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the borrower included in the forgiveness amount
Do NOT include the following when calculating eligible payroll costs for loan forgiveness:
Qualified wages paid during April 1, 2020, through December 31, 2021, that are taken into account for purposes of claiming:
The Employee Retention Credit under section 2301 of the CARES Act, as amended by sections 206 and 207 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (additional Guidance on the Employee Retention Credit under Section 2301 of the Coronavirus Aid, Relief, and Economic Security Act (PDF) and Guidance on the Employee Retention Credit under the CARES Act for the First and Second Calendar Quarters of 2021 (PDF) are both available from the IRS), and the Employee Retention Credit under section 3134 of the Internal Revenue Code of 1986, as enacted by the American Rescue Plan of 2021. (Note that reporting these qualified wages in the payroll costs entered on your loan forgiveness application will affect the amount of qualified wages that can be used to claim the employee retention credit.)
Non-payroll (for expenses that were incurred or paid during the Covered Period and showing that obligations or services existed prior to February 15, 2020, for the first three listed obligations/services):
Business mortgage interest payments: Copy of lender amortization schedule and receipts verifying payments, or lender account statements
Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments
Business utility payments: Copies of invoices and receipts, cancelled checks or account statements
Covered operations expenditures: Copy of invoices, orders or purchase orders paid, and receipts, cancelled checks or account statements verifying eligible payments
Covered property damage costs: Copy of invoices, orders or purchase orders paid, and receipts, cancelled checks or account statements verifying eligible payments, and verification that costs were related to uninsured property damage due to public disturbance vandalism or looting that occurred in 2020
Covered supplier costs: Copy of contracts, orders or purchase orders in effect at any time before the Covered Period (except for perishable goods), and copy of invoices, orders, or purchase orders paid, and receipts, cancelled checks, or account statements verifying eligible payments
Covered worker protection expenditures: Copy of invoices, orders or purchase orders paid, and receipts, cancelled checks or account statements verifying eligible payments, and verification that expenditures were used to comply with COVID-19 guidance
This list of documents is not all-inclusive.
3. Submit the forgiveness form and documentation to SBA or your PPP lender:
Depending on whether your lender is participating in direct forgiveness, complete your loan forgiveness application and submit it via the SBA direct forgiveness portal or via your lender with the reÂquired supporting documents. Your lender may follow up to request additional documentation.
4. Continue to monitor your application for forgiveness:
If SBA undertakes a review of your loan, SBA or your lender will notify you of the review and the SBA loan review decision. You have the right to appeal certain SBA loan review decisions. Your lender is responsible for notifying you of the forgiveness amount paid by SBA and the date on which your first payment will be due, if applicable.
Borrowers who need assistance with direct forgiveness can contact SBA at our dedicated forgiveness call center: 877-552-2692. The call center is open Monday – Friday, 8 a.m. - 8 p.m. ET. The call center can only assist direct forgiveness applicants. All other borrowers should contact their PPP lender. Direct forgiveness borrowers can also consult our direct forgiveness knowledgebase for frequently asked questions.
COVID-19 relief options
SBA offers help for small businesses affected by COVID-19.
This forgivable loan helps keep your workforce employed.
Restaurant Revitalization Fund
Funding for eligible restaurants, bars, and other food service businesses.
This low-interest loan provides help to businesses experiencing revenue loss.
We will make loan payments for some existing SBA borrowers.
This grant supports eligible venues affected by COVID-19.
Use this chart to determine your eligibility when considering different funding options.
EXPLORE NON - SBA LOAN OPTIONS
Step 1 Determine whether you are eligible for a business loan.
Step 2 Figure out how much you can pay each month.
Step 3 Determine whether and how you'll use collateral to secure the loan.
Step 4 Determine the type of financing you'll need to keep your organization afloat.
Step 5 Shop around for small-business lenders.
Bank Loans Are Best For Established Businesses That Have Collateral And A Strong Credit Score.
SBA Business Loans Are Best For Businesses That Can't Meet Traditional Banks Strict Funding Criteria.
Online Business Loans Are Best For Businesses With Lower Credit Scores, Who Need Fast Funding
Small Business Grants Are Best For Small Businesses Looking For Free Or Low Cost Financing
Credit Union Small Business Financing Are Best For Small Business That Are Credit Union Members Who Have A Personal Relationship With The Credit Union.
Small Business Crowdfunding Is Best For Businesses With New Products That Have Lots Of Public Interest.