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The Complete Guide to Getting an SBA PPP Loan

Getting an SBA PPP Loan

Guide to Getting an SBA PPP Loan

A small business is referred to as a personally owned and operated business. It typically consists of a small number of employees. As we live in the modern digital transformation age, most people run their small businesses digitally. Every second individual wants to start their own business and outsell their products or services. But the reality is that small business is finding it harder than ever to get loans, whether for a startup or SBA PPP Loan. For every individual, getting a loan for their small business is a major hurdle due to the strict lending standards by banks and private loan providers.

What is an SBA loan?

SBA loans are not easy to get we all know that. Still, some guidelines you follow properly can get an SBA loan fast. SBA is one of those loans that can help you grow your small business. This loan has relatively low rates, and according to the new Disaster assistance policy, the interest rate has become lower.

This is the first step to getting your SBA loan approved. This can depend upon your credit score. To get an SBA loan , it is mandatory to have a good credit score history of 650 > this is the minimum credit score range for eligibility to get SBA loans. This also depends on the lender. Multiple lenders can provide loans of less than 650 credit points as well. One thing more, an SBA loan is always a secure loan, so you need collateral equal to the amount of loan you want. But with the SBA PPP Loan program, there are no FICO requirements, and it’s unsecured!

What is an SBA PPP loan program

PPP (Paycheck Protection Program) is a type of loan which is designed in such a way that it should provide incentive directly to small business owners to pay off their worker’s payroll. SBA can forgive this type of loan if certain small business employees are on the payroll for 2 months.  You can use this loan to pay wages to workers, rent, mortgage, or utilities.

All COVID-19-affected small business owners can apply for this loan. This loan is being distributed in two time periods. In the first period, the amount of $345 billion was distributed among small business owners. A second term has started in which over $310 billion will be distributed under CARES (Coronavirus Aid, Relief, and Economic Security Act) ACT.

Ways to get PPP Fast

There are certain things that you must keep in mind when you apply for PPP.

  1. Try to apply for PPP as early as possible
  2. The Paycheck protection program will provide you the amount of $10 million or 2 and a half-year payroll.
  3. All the loans will be forgiven if you follow the guidelines properly.
  4. Check your eligibility before you apply.
  5. It is better to apply through SBA 7(a) lenders.

Eligibility criteria for SBA PPP Loan

To get a PPP loan you must ensure that your business is highly effective with the recent outbreak of COVID-19. Your business should meet all these requirements to get a loan.

  • You are in business as a sole owner or with employees.
  • Your business should have 500 or fewer employees.
  • It can be a tribal business.
  • The franchise, hotels, or restaurants should be independent.

Applying for PPP

As we have mentioned above that you can apply through already existing SBA 7(a) lender. There are over 1800 SBA 7(a) approved lenders available in the market you can apply through any one of them.

Features PPP Loan
Administration SBA 7(a) lenders
The amount you can apply for Less than 10 million
Term 2 years
Rate of interest 1 %
Deferral Half-year
Prepay option Allowed
Collateral No
Forgiveness Yes for 75% payroll
Guarantee NO

 

BitX Funding is the online marketplace for small business owners looking to fund a project. We specialize in connecting small business owners with lenders who will compete for your business. We believe small business owners drive the economy and are passionate about helping your company reach its full potential. You can reach a loan specialist by toll-free at 1-800-824-2407, or email at [email protected] or applying online here and we can guide you on which loans are the best fit for your business.

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