The PPP has run out of money. Now what?

Note: This blog discusses the first round of the PPP initiative, which ended in 2020. For more information on the PPP2, please see this post.

As of today (4/16/20), the $350B fund allocated to the PPP loan initiative is officially tapped out, and the SBA is no longer accepting new applications. More funds may be added, but talks in Congress are currently stalled, and it’s unknown when the additional money will arrive. So what does that mean for you?

If you applied for a PPP loan, and were notified that your loan was approved: If you received a “guarantee notice” that your loan was approved, you should be in the clear to receive your approved funds. At this point you’ll need to work with your lender on next steps to actually getting your money.

If you applied through one or more lenders, but haven’t heard back: The challenge here is that the application process involves several steps that are out of your company’s hands (see our previous update for a more detailed breakdown), and unfortunately a lot of businesses who applied on time did not make it through approvals before the funds ran out. 

At this point, there is little you can do besides wait for additional funding to be added. If and when the program is restarted, the processing queue will presumably pick up where it left off, and your application will hopefully be near the front of the line.

Your one other course of action is to apply with another lender in parallel. We talk about the pros and cons of that in our last update.

If you haven’t applied yet: If you qualify for a PPP loan and intended to apply for one, you still can and should. As we explained in our previous update, in order to get a PPP loan your application must first be accepted by your lender, who then submits it to the SBA. While the SBA is not accepting new applications at this time, you can still get through the approval process with your lender, so that your application is ready to be submitted as soon as the PPP restarts with additional funds. 

While there’s no timeline right now on when new PPP loans may be available, it’s still a good idea to get as far in the process as you can. The initial fund of $350B ran out in just 13 days. Assuming the program continues to be first-come, first-serve, being first in line could be the difference between making it through to approval in time or not.

If you haven’t claimed the R&D tax credit for your startup, you should take a serious look at it, since companies can get back up to $250k in payroll tax credits. Pilot has produced a guide on the topic, and a service to help claim the credit. And of course, if you need help with bookkeeping, tax prep, or CFO services, please get in touch.