April 16, 2020
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PPP Mythbusters
You’ve probably already heard about the government’s $349 billion Paycheck Protection Program (PPP). Small employers can borrow up to 2.5 times their monthly payroll costs through the program. The loans are 100% forgivable, depending on how the money is spent.
You’ve also probably heard some misconceptions about the program. Let’s set the record straight about the most common myths:
Myth: It’s too late to apply for a PPP loan because the money has already run out.
Fact: It’s very likely that more money will be allotted to the program. Your lender may still be taking applications to submit to the government once more funds become available. We recommend that you apply immediately in order to get in line for the next disbursement of dollars.
Myth: I can only apply for either a PPP loan or an Economic Injury Disaster Loan (EIDL).
Fact: You can apply for both, but you can’t double dip. This means you can’t use funds from both loans on the same expenses in the same time period and still have the full PPP loan forgiven. While both PPP and EIDL are currently out of money, it’s expected that more PPP funds will be disbursed in the coming weeks. We are not currently able to offer advice on if/when EIDL will receive more funding.
Myth: I can only get my PPP loan forgiven if I use it for payroll.
Fact: The CARES Act requires that you use 75% of the PPP funds on payroll. The other 25% can be used on qualifying business expenses such as your business rent and utilities or interest on a mortgage.
The 5 As of COVID-19 management
What do businesses who’ve been successful at navigating the current crisis have in common? They “assess, apply, and adapt,” says Steve Freiss, a New York Times writer and small business owner, after talking to businesses across the country about their strategies for keeping their businesses alive. Adaptation can sound hard, but these stories provide some great inspiration.
How to apply for additional government funding
With PPP and EIDL both out of funds, businesses have the option of getting more immediate cash relief from other programs funded by the U.S. Small Business Administration (SBA) like the Express Bridge Loan (EBL) Pilot Program. But applications to this are often cumbersome and confusing. We’ve put together a guide to apply for the program.
Another alternative is looking into state-specific or private funding options. Refer to our constantly-updated spreadsheet of all funding options:
On our radar:
- A crowdsourced COVID-19 loan tracker to monitor how many loans have been paid
- The New York Times’ Coronavirus FAQs for small businesses
- What do countries with the best coronavirus responses have in common? Women leaders
Want more small business news and resources? Check out past editions in our archive.
