April 29, 2020

Navigating Government Loans: Paycheck Protection Program (PPP)

Saying that these are strange, difficult times is an understatement. Every day there seems to be something new to deal with and finding answers feels like a full-time job. 

At Chickasaw Community Bank (CCB), we wanted to take a chance to provide resources about a program you’ve probably heard about, the Paycheck Protection Program. 

The Paycheck Protection Program (PPP) is a loan program established by the U.S. Small Business Administration (SBA) to help businesses keep their workforces employed during the COVID-19 crisis. The loans offer a 1% interest rate and no repayment schedule for the first 6 months. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. The guidelines about who can apply are a bit technical, but in general the program is targeted toward small businesses and organizations with less than 500 employees. This could also include people who are self-employed, not just those with more conventional employment. 

The PPP officially began funding applications when it opened up on April 3rd, 2020. Within two weeks, the entire $349 billion of the funds appropriated for the PPP had been spent covering nearly 1.6 million loan applications.

CCB was able to process 97 loans before the funding was exhausted, providing valuable resources to help our customers weather these turbulent times.

Lawmakers reconvened and passed a second round of funding for the PPP, which provided another $320 million dollars in funding. The application portal for this additional funding opened on April 27th, and as of this blog post, applications are still being accepted. There are even rumblings in the financial industry that a third round of PPP funding may be made available, as lawmakers believe that the total figure necessary to help bail out small businesses may reach as high as a trillion dollars before it’s all over. 

The situation surrounding the PPP is quite fluid, so by the time you’re reading this, all available funds may have been fully allocated. If you weren’t able to get your application approved during the first or second rounds of funding, there’s still time to keep you from being left out. If more money is appropriated for the program, you’ll have chance to secure the resources that you need for your small business. 

If you weren’t able to get your application approved before the first round of PPP funding was used up, you’re not going to be left out. The lawmakers in DC are working on appropriating more funds to add to the PPP program, and when that funding is confirmed, the application portal will be reopened. 

For customers that weren’t able to get their application processed in time, we recommend that you go ahead and fill out your application and submit it to your lender. It won’t get processed immediately, but that will put you in the queue and give you a better position for the day when the funding portal is eventually reopened. There’s no solid word about the size of the next round of funding for PPP, but it’s sure to be large enough to give you a decent chance to participate. 

If you’re not sure if you qualify, please call your lender. We just can’t stress this enough. Many small businesses or self-employed individuals are assuming that they’re not qualified for the assistance under the PPP. Don’t assume that you don’t qualify. In many cases guidelines have been eased, or entirely new programs have been created. You’ve got nothing to lose but the few minutes it would take to pick up the phone and talk to your banker. The landscape around these programs is shifting daily, and keeping up with it is a full-time job. Thankfully, navigating these strange waters is what Chickasaw Community Bank is here to do, and we’re happy to help our customers identify any opportunities to help them reinforce their financial position. 

Keep coming back to CCB’s blog and we’ll keep telling you about the financial issues that matter to you. We mean it when we say, “Building Better Lives for Everyone,” and this is one avenue to help you take control of your financial situation. Stay safe, and we’ll be talking to you soon.

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