As America officially hits a recession, the SBA’s PPP loans are helping government contractors fulfill their obligations. Tens of thousands of staff and their families have likewise benefited from this necessary program.
If you haven’t gotten a PPP loan, your time is running out. According to SBA Administrator Jovita Carranza, “eligible borrowers in underserved and disadvantaged communities” have until only June 30 “to obtain a loan number for a PPP loan.”
The good news is that Carranza is urging the SBA’s lending partners to prioritize helping veterans, ethnic and racial minorities, and women. This means that if you fit the SBA’s qualifications and are in any of these traditional set-aside categories, you can obtain a no-interest or 1% interest loan which keeps your cash flow high and your team mission-focused. Loan payments are deferred for six months, all fees are waived, and no collateral is required.
But you have to act by June 30 or miss out on the opportunity. Here are four tips to get you started:
- First, make sure that you actually want a PPP loan. The SBA audit and review process is fairly complex, so if you’re concerned that the minutiae could put your company in jeopardy, definitely reconsider pursuing a loan. The same is true if you are unable to pay back the 1% loan; the SBA has threatened to not forgive loans if the paperwork isn’t totally squared away.
- Use this SBA tool to find a qualified PPP lender with which you have a relationship. With so many details necessary to secure a PPP loan, a known and trusted partner will be able to help you move faster and easier through the process. Attempt to find a lender through your network if possible.
It’s also important to check if the lender is still providing PPP loans. Bank of America, for example, stopped accepting new applications after June 22.
- When you apply for a PPP loan, make sure your books are in order but don’t waste time aiming for perfection. There will be time after applying to double-check tax records and other information required to receive the loan.
- Be sure to keep up to speed on the standards, regulations, and standards to ensure that your loan is the right one for you. SECAF is a good resource for this type of information and has a comprehensive list of legislative program changes and other COVID-19 pandemic-related material.
PPP loans have been a lifeline for many government contractors, especially as we head into awards season. If it makes sense for your company, be sure to get in the door now for this once-in-a-generation opportunity to quickly and cheaply secure capital to ensure your company’s success.
Contact us today to learn more.