PPP Loan Application – What Small Business Owners Need To Know
by Arnab Dey Loans & Credit Published on: 11 May 2023 Last Updated on: 19 October 2024
There are many things to consider when applying for business funding. Ultimately, the approval process depends on how confident a lender is in your ability to repay your loan.
Small business owners can take a few steps to improve their financing chances. These tips can help you save time and energy that could be better spent growing your business.
Do Your Research
Before completing your PPP loan application, be sure to do your research. Ensure you’re working with a lender that offers your business the correct terms and payment plans.
If you’re unsure where to start, use the SBA’s Lender Match tool to find an approved lender. Once you’ve found a few available to you, start interviewing them.
You can also ask your existing lenders if they participate in the PPP program. If they are, it may be worth exploring whether they offer forgiveness.
As with any forgivable loan, keeping careful records of how you spend the funds and how they are forgiven is essential. This can help you maximize your R&D tax credit and make the process more transparent to your lender.
Gather Documents
Before you apply for a PPP loan, be sure to gather all of the documentation that your business needs. This will help you ensure that your application process goes smoothly and prepare you for any questions your lender may have about the documents you submit with your loan.
c should consider gathering a complete set of contemporary records with information addressing issues such as SBA size standards, compliance with SBA affiliation rules, employee count, and more. These records should include a written analysis of these critical eligibility matters generated internally or by outside consultants or counsel.
Borrowers should also collect and maintain any payroll costs associated with their PPP funds. This includes costs directly related to the business’s operations, such as salaries, wages, commissions, and other employee compensation.
Make Sure You’re Eligible
Before applying for a PPP loan, ensure your business is eligible. This is an essential step because it can affect your funding eligibility and the amount of funds you receive, if any.
For example, businesses with fewer than 500 employees, many nonprofits, tribal business concerns, and self-employed workers/sole proprietors may be able to receive PPP loans.
However, businesses with over 1,500 employees or those not operating during the pandemic are not eligible for the program.
Additionally, business owners should remember to include any economic injury disaster loan advances or payments received when applying for PPP loan forgiveness. This will ensure that your business’s eligibility for loan forgiveness is not impacted by duplication in how you used your PPP proceeds.
Complete the Application
Once you’ve determined that your business is eligible for the PPP and collected all the documents, it’s time to complete the application. This will help ensure you can submit and receive a PPP loan quickly.
The SBA’s online application will guide you to the version of form your business needs. There are two forms for first-draw loans and one for second-draw loans.
For your application to be complete, you must verify your business type (sole proprietorship, partnership, C corporation, or LLC). Also, ensure your business’s total gross income matches your calculated calculations.
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