Resumption of Nonprofit PPP Loans – April 27, 2020 – WASHINGTON – Administrator of the U.S. Small Business Administration Jovita Carranza and U.S. Treasury Secretary Steven T. Mnuchin issued the following statement on the resumption of the Payroll Protection Program (PPP): “The Small Business Administration will resume accepting nonprofit PPP loan applications on Monday, April 27 at 10:30AM EDT from approved lenders on behalf of any eligible borrower. This will ensure that SBA has properly coded the system to account for changes made by the legislation. We encourage all approved lenders to process loan applications previously submitted by eligible borrowers and disburse funds expeditiously. All eligible borrowers who need these funds should work with an approved lender to apply. Borrowers should carefully review PPP regulations and guidance and the certifications required to obtain a loan.”
My nonprofit was approved for a PPP loan. Will I still get funding? How long will it take?
If your organization was approved and received confirmation from your lender, you can expect to receive PPP funds in around seven to 10 days. If you think you were approved, but didn’t receive any form of confirmation from your lender, it’s likely that you won’t receive a loan from the first $350 billion Congress put aside for this program. Many bank clients believe they’ve been approved, but weren’t. The best way for a business owner to check whether or not they’ve been approved is to follow up directly with their lender. Many lenders have been proactive in updating their clients, and are planning to submit applications that weren’t approved by the SBA before the funding initially ran out.
How can my Charity apply for the new round of PPP funds?
According to the SBA, lender enrollment and new loan applications will accepted on Monday, April 27th at 10:30am. While waiting for PPP funding to resume, businesses should collect all required documentation for the program and send it to their bank lender. This enables the bank to prepare for submitting a client’s application as soon as the program opens again. Tony Wilkinson, president and CEO of the National Association of Government Guaranteed Lenders, said that he expects funding to once again be gone in as quickly as a week.
Lenders will be hitting the submit button on a significant number of applications as soon as it’s open,” he said.
If my organization applied to the first round of PPP, do I have to apply again?
Business owners don’t have to apply again if their application didn’t get approved in the first round. Many lenders have held on to these applications, and are prioritizing them in the pipeline for when the program opens up again.
How are lenders handling loans that didn’t get funded before the money ran out for the PPP?
Many lenders are continuing to process loans that didn’t get funded in the first round. They expect the process to move quickly when funds are available again. Umpqua Bank, for example, has spent the past several days making sure small businesses have documentation and that their applications are completed and ready to go. The bank has had its teams working in shifts around the clock to get the high volume of applications completed. “Our goal is to have as many small-business applications ready to submit to the SBA as soon as it reopens the PPP application process,” said Tory Nixon, senior executive vice president and chief banking officer at Umpqua Bank. While it isn’t too late for business owners who haven’t yet applied, there is incredibly high demand. Reach out to your lenders as soon as possible to inquire whether they have the capacity to process your application. “With the next round, it’s really a race against the clock to help as many small businesses as possible before the funding is again fully committed, which could happen within just a few days,” said Mr. Nixon.
What can my nonprofit use my PPP loan for?
PPP loans are primarily to be used for payroll-related expenses. At least 75% of the loan is required to be used for payroll; it is anticipated that no more than 25% can be used for mortgage interest, rent or lease payments, utilities and interest or debt accumulated since February 15th. Utility expenses encompass necessities like cable and internet. Exceptions include personal expenses, including compensation above $100,000. PPP funds must be used in 8 weeks to be forgiven. If unused or used for anything other than payroll or utility expenses, the loans aren’t forgivable and must be repaid, according to the Treasury’s fact sheet, which can be found online. Business owners will also owe money if they fail to maintain employee head-count.
What are some other alternatives?
Steve Denny, a principal at Innovative Business Advisors in Missouri, encourages nonprofits to pursue other forms of financial assistance. The firm has aggregated a list of local and private grants for business owners from Facebook’s small business grant program. Gusto, a payroll company for over 100,000 small businesses, said that it reminds its clients that there are a lot of resources that can be found from state, local and private sources. The company has a public list of potential relief resources for small businesses, as well as a spreadsheet that is updated regularly with available programs across the country.
For more information on the Resumption of Nonprofit PPP Loans or SBA’s Paycheck Protection Program, visit: sba.gov/paycheckprotection.
Resumption of Nonprofit PPP Loans was first posted at INSIDE CHARITY
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