Keeping a business running smoothly is difficult enough without the added stress of living through a pandemic. So, it’s no surprise that small businesses, start-ups, and entrepreneurs have been hit particularly hard over the past ten months. That’s why it’s especially important that small business owners take advantage of the paycheck protection program (PPP).
After social distancing restrictions began in March, the number of active business owners in the U.S. decreased drastically—and that number continues to decline. In fact, the majority of small business owners have indicated that they fear the worst is yet to come in terms of the economic impact of COVID-19.
Thankfully, Congress passed legislation in December for the Small Business Association (SBA) to re-open the Paycheck Protection Program (PPP) and provide funding to small businesses nationwide. As of January 15, the application process is open to small businesses, lenders with less than $1 billion in assets, and, in an effort to help under-served and minority business owners, Community Financial Institutions (CFIs). It will remain open for all eligible lenders from January 19 through March 31, 2021.
Are you a small business owner in need of emergency financial support? Here’s what you need to know about applying for a PPP loan.
PPP can help you stay in business
While the main reason PPP loans exist is to incentivize business owners to keep employees on their payroll (and connected to benefits like health insurance), they cover so much more. For example, you can use the funding to pay for rent, utilities, interest on your mortgage, additional expenses for protecting workers from COVID-19, and uninsured property damage caused in 2020 by looting and vandalism.
Learn if you qualify for Paycheck Protection Program funds
If you are applying for a PPP loan for the first time, you are eligible if you:
- Are a sole proprietor, independent contractor, or self-employed person
- Own a small business that meets the SBA’s size standards (i.e., 500 employees or less)
If you applied for and received a PPP loan in 2020 and would like to apply again, you are eligible if you:
- Have used or will use the full amount of your first PPP loan
- Own a small business with 300 employees or less
- Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020
You can visit the SBA’s website to learn more about whether you qualify to apply for a PPP loan.
Here’s how to apply
Think you qualify for a PPP loan? Great! You’re ready for the next step: the application process.
Since applying for a loan can feel overwhelming, we’ve put together a list of options for how to go about it (starting with the easiest one):
- Contact our incredible partner, Middlesex Federal Savings, to speak with a knowledgeable business banking representative and get help filling out and submitting your loan application.
- Use the SBA’s free online tool to connect with an approved lender, compare rates/terms/fees and submit your loan application.
- Download the appropriate application form (note: there are two, one for first-time applicants and one for second-time applicants) and submit it to an SBA participating lender.
Before speaking with a lender, you should be prepared to provide additional information about your business, such as your credit history, business plan, financial projections, amount and use of funds, collateral and industry experience.
If you are a sole proprietor and a Novo account holder, HERE is everything you need to apply for a PPP loan through Novo.
If you are a single-member LLC and a Novo account holder, HERE is everything you need to apply for a PPP loan through Novo.
More information to come for Corporations & LLCs applying for PPP loans through Novo.
Don’t forget that applications are due no later than March 31, 2020. For more information on COVID-19 relief options for small businesses, visit the SBA’s website.