Now That the PPP is Closed, What are Your Funding Options?
The Paycheck Protection Program is a loan program backed by the Small Business Administration. The program helped businesses maintain their workforce as the Covid-19 crisis emerged. The PPP ended on May 31, 2021, which was unfortunate for many businesses that have not yet bounced back from the financial blows. For business owners who are looking for ways to keep their businesses afloat, there are other options to get funding.
Where is the PPP Loan Now?
The PPP is a loan that incentives small businesses that are registered with the US SBA to continue the employment of their workforce. Millions of small businesses were able to benefit from the program’s forgivable loans. At the start of 2021, the program issued its third round of funding. The application was closed on May 31st of the same year.
The Small business Administration approved almost 11 million loans with over $780 billion in business aid since May 10, 2021. Currently, there are no plans for the fourth round of funding. As more and more states ease their COVID-19 rules, many businesses are also trying to go back to pre-COVID operations. If you have a small business and you need funding sources to maintain your business, here are some options as alternatives.
Alternatives to the PPP Loan
These loans can be a good source of funding depending on the financial needs of your business. It is key to read about the requirements and repayment terms for these programs and determine the best option for your business.
SBA 7(a) loans – The SBA’s primary program that can be used as capital for both long-term and short-term investments. The loans can be guaranteed by the SBA up to a specific percentage. However, these loans may have more demanding qualification criteria. SBA 97(a) loans usually have 10-year terms. There are also microloans offered through community-based, nonprofit organizations. A microloan is best for businesses that do not require more than $50,000 to get back on track.
Economic Injury Disaster Loan – Agricultural businesses, non-profit organizations, and other small business owners can use these loans to fund their operating costs and for working capital. The EIDL, however, is not forgivable, unlike the PPP. But businesses can take advantage of low and fixed terms.
State-Specific Loan Programs – The National Conference of State Legislatures has a list of different funding options available that are available to each state.
Small Business Grants – Federal, state, and private agencies offer different types of grants. Grants.gov is a database where you can find federal grants for your business field. The Small Business Technology Transfer and Small Business Innovation Research is a list of available grants for small businesses involved in specific innovation or research in science.
Is a Business Loan the Right Answer?
There are ways to get funding even when you’ve gone through all your grant and federal loan options. You can look into lines of credit and business loans. These are the top lenders for business loans depending on what you need.
1. Rapid Finance – You can get a quote for various credit and flexible loan options in just a few minutes. Rapid Finance can link you with SBA loans, business loans, and merchant cash advances. The company works with various types of businesses and business sizes. There is a great chance for you to find the funding you need when you submit an application.
2. OnDeck – If you need immediate funding, OnDeck can get your loan approved and funds released in one day. They have low requirements for credit scores but you need to back up your loan with a personal guarantee and a business lien. You also need to prove that you have more than $100,000 in annual revenue.
3. National Funding – Their business loans can go up to $500,000 which can be used to finance equipment and other business needs. It’s easy and quick to apply but we believe startups will find a better alternative elsewhere. National Funding requires a business to be active for at least a year and earn a $12,500 monthly income.
Bottomline
Now that the Paycheck Protection Program has ended, you need to find other options for funding. Fortunately, there are other options that can help keep your business afloat. Lenders and government agencies are willing to help businesses that were greatly affected by the COVID-19 pandemic. You can start by searching for loans that are specifically available in your city or state. Then read lender reviews to find the most advantageous loans for your business.
