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Nonprofit PPP2 Working Better This Time Around

Nonprofit PPP2 Working Better This Time Around

Nonprofit PPP2 Working Better This Time Around is based on INSIDE CHARITY’s direct communication this past week with the Small Business Administration (SBA). The number of Paycheck Protection Program (PPP2) loans to U.S. nonprofits and small businesses more than doubled in the fourth week of the second round of pandemic relief aid, according to new data from the SBA. This week, the SBA hit a major milestone of approving $104 billion of PPP funds to more than 1.3 million nonprofits and small businesses.

About three-quarters of PPP2 loans approved by the SBA are for borrowers who already received one last year. Under a law passed by Congress in December, companies can apply for a second loan if they can show revenue loss.

Nonprofit PPP2 Working Better This Time Around

The U.S. Small Business Administration (SBA) announced changes Wednesday, Feb. 10, designed to reduce delays in the Paycheck Protection Program (PPP) approval process. The changes follow a range of issues stemming from additional validation checks that held up a significant percentage of nonprofit PPP applications. To address concerns raised, the SBA said it will allow lenders to directly certify the eligibility of nonprofits for first- and second-draw loans. Additionally, the SBA will not require lenders to submit supporting documentation of borrowers with validation errors until they apply for loan forgiveness.

The changes aim to speed up the flow of funds to PPP applicants while “maintaining the integrity” of the program, the SBA said. Here’s how:

  • Reaching more of the smallest businesses; 82% of all loans going to businesses requesting less than $100,000
  • Reaching rural communities in a meaningful way; 28% of businesses who have received funding this round are in rural communities
  • Increasing partnerships with Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) who are trusted agents in extending economic relief to minority communities and underserved populations

The SBA is also following through on its commitment to take additional steps towards improving the speed to resolve data mismatches and eligibility concerns so that small businesses have as much time as possible to access much needed PPP funds, while maintaining the integrity of the program. Three important changes will:

  1. Enable lenders to directly certify eligibility of borrowers for First Draw and Second Draw PPP loan applications with validation errors to ensure businesses who need funds and are eligible receive them as quickly as possible
  2. Allow lenders to upload supporting documentation of borrowers with validation errors during the forgiveness process
  3. Create additional communication channels with lenders to assure we are constantly improving equity, speed, and integrity of the program, including an immediate national lender call to brief them on the Platform’s added capabilities

“We are pleased that the Paycheck Protection Program is targeting the smallest of nonprofits and small businesses and providing economic relief at a crucial time in American history. The SBA has achieved another major milestone to provide critical recovery capital to America’s small businesses by approving 1.3 million PPP loans totaling $104 billion in the current round. While we are excited that we are doing a better job of reaching the hardest hit industries and communities, we are committed to taking additional steps to ensure that there is equitable access for underserved businesses and that we are leading with empathy to support small businesses in a difficult spot,” says SBA Senior Advisor to the Administrator Michael Roth.

Interim SBA Director, Tami Perriello shared, “The SBA and lenders are taking more strides to improve the Paycheck Protection Program (PPP) so that nonprofits and small businesses can access much needed PPP funds to persevere through the pandemic, recover, and build back better. The new Administration is working with the Agency to increase equitable access to underserved small businesses, to assure the integrity of the program, and to promote rapid and efficient distribution of funds.”

SBA approved an expanded list of NON-BANK lenders including:

BlueVine: This online business lender will accept applications from any small business interested in applying for a PPP loan for first or second draw loans. Existing BlueVine customers will be contacted by BlueVine when their PPP loan application is ready.

Centerstone SBA Lending: This nonbank, SBA-approved lender is accepting applications from small businesses seeking PPP loans for both first and second draw loans.

Fountainhead: As a nonbank lender licensed to make SBA 7(a) loans, Fountainhead is accepting applications from any small business for first and second draw loans.

Harvest Small Business Finance: This nonbank, SBA-approved lender says it focuses on commercial real estate lending to “small business borrowers who have traditionally been ignored by large, regional and community banks.” It is accepting applications for PPP first and second draw loans from any qualifying business through its website.

Kabbage: Prior to the coronavirus crisis, this fintech company made loans to small businesses and consumers through its lending platform. It then partnered with an SBA-authorized bank and became a direct SBA lender to process and disburse PPP loans to qualified small businesses during PPP Round. A spokesperson for Kabbage said it is allowing eligible customers seeking a second draw loan to apply through K.Servicing.com, a new entity that was created through American Express’ acquisition of Kabbage.

Lendistry: This California-based community development financial institution (CDFI) has an online application process and can submit PPP first and second draw loans to the SBA from small businesses in the following places: California, Colorado, Florida, Georgia, Illinois, Iowa, Maryland, Michigan, New Jersey, New York, Pennsylvania, Texas and the District of Columbia.

Liberty SBF: Although their background is in providing loans for commercial real estate, Liberty SBF is an approved SBA lender and is accepting applications for both first and second draw PPP loans.

Newtek: Newtek’s Small Business Finance Program processed PPP loans that received funding through the first rounds of PPP funds. Its website is currently accepting applications for first and second draw loans.

QuickBooks Capital: Owned by Intuit and known for its accounting software, QuickBooks Capital is now accepting applications for second draw funding loans.

Ready Capital: This commercial lender is an approved provider of PPP loans. It has resumed accepting applications and has partnered with Lendio to process and submit applications for first and second draw funding to the SBA.

Square Capital: Although Square is best known for its point-of-sale software, the company received SBA approval to accept applications for PPP loans. Its website says that they should be ready to accept applications soon for this latest round of funding, but only from existing Square customers.

The Loan Source: One of a small group of nonbank lenders that were approved by the SBA back in 1994, its website says you can register to be notified when their application portal is live.

Biz2Credit: The online lender is currently accepting applications for first and second draw loans, which it will submit directly to an SBA-approved lender. In order to apply, an applicant must first have a Biz2Credit account.

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Nonprofit PPP2 Working Better This Time Around and other INSIDE CHARITY content and comments are for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing on this site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto.

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Jimmy LaRose
Jimmy LaRose
Jimmy LaRose’s passion for “people who give” has inspired philanthropists around the world to change the way they invest in nonprofits. His belief that donors are uniquely positioned to give charities what they truly need – leadership rather than money – is the basis for his work with individuals, governments, corporations and foundations, in the U.S., Europe, Asia & Middle East. Jimmy, in his role as author, speaker, corporate CEO & nonprofit CEO champions all of civil society’s vital causes by facilitating acts of benevolence that bring healing to humanity and advance our common good. He and his beautiful wife Kristi are citizens of the Palmetto State where they make their home in Lexington, South Carolina.


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  6. Your insights into how the second round of PPP loans for nonprofits is working more effectively are really valuable. It’s great to hear about the improvements that have been made, like simplified applications and more targeted assistance. Your explanation of the changes and your tips for nonprofits navigating the process are very helpful. Thanks for shedding light on this important topic and providing guidance to the nonprofit community!

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