There is still time, apply for a PPP Loan now!
Yes, you heard that right. The PPP Loan application has been extended until May 31, 2021. If you are a small business that is looking for financial help, this loan may be the answer you have been looking for. To help determine if this is what you need, here is the information we have gathered.
Before we give you the details, let’s make sure you are clear on what a loan is. A loan is a type of credit in which you borrow money from someone or form a financial institution and you commit to pay it back by a certain date. You will be responsible for paying back the principle (the amount that you borrowed) and the interests and/or other charges that are detailed and agreed on in the Loan Agreement.
PPP Loan
The Paycheck Protection Program (PPP) is a loan program that was created by the U.S. federal government to assist businesses through the 2020 COVID-19 pandemic. It provides small businesses with funds they need to keep workers on their payroll. The money you get can be used to cover payroll costs, such as benefits, mortgage interests, rent, worker protection costs, etc.
The unique, most important characteristics of the PPP Loan are:
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It has a fixed 1% interest rate
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The repayment period is of 5 years
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You could apply for full or partial loan forgiveness of the loan
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It can cover loans of up to $2 million, depending on the small business’ payroll information
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No personal or collateral guarantees are required to apply
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Neither the government nor lenders will charge any fees to the small business
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The deadline to apply is May 31, 2021
To apply to the Paycheck Protection Program, you have to go through a lender. If you don’t know of any lenders already, you can use the Lender Match or Lenders Map that the U.S. Small Business Administration has prepared to facilitate the search process.
If you already applied and received a PPP Loan last year, you can apply for a second draw. For this, you will have to submit all the application materials as you did the first time. You can also use the same lender you worked with the first time but it is not a requirement that you do.
PPP Loan Forgiveness
As we explained earlier, the Paycheck Protection Program has the option to apply for the partial or total forgiveness of the loan you received. This means that if your loan is forgiven, you are no longer obligated to make your loan payments (this is determined in a case by case scenario and we recommend working with your lender and financial advisor to determine the best way to navigate the PPP Loan forgiveness process and application). You can apply for loan forgiveness anytime up to the maturity date of your loan.
In order to apply you will have to:
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Contact your lender and submit the appropriate form
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Recollect all the important information and documents you will need to support your application
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Submit all the documents and the application to your lender
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Work with your lender throughout the process
The Paycheck Protection Program and its PPP loan forgiveness are great resources and help for small businesses still recovering from the COVID-19 pandemic. At Access Capital, we know that the process may look confusing and that you may need help throughout the process, so don’t hesitate and contact us to schedule a free first consultation with one of our Financial Advisors. Contact us, we will be happy to help! And always remember, our experts are ready to help you in English or Spanish.
Access Capital is a financial consulting company with over 20 years of experience in the financial industry of California. It focuses on helping small businesses grow through their services that include financial consulting and advising, small business loan processing, digital marketing, business coaching, and accounting & management. For more information go to accesscapital.org.