The SBA PPP ran out of funds. Now what?

Yesterday the Small Business Administration (SBA) emailed various financial institutions and other banking industry stakeholders to notify them that the SBA Paycheck Protection Program (PPP), SBA loans intended to be used for subsidizing payroll due to the coronavirus, had run out of money. Within two weeks of launching there had been more than 350 billion dollars in loan applications. That is a pretty big deal.

I hate to say “I told you so”. But…I called it in a video on my Youtube channel on April 9th. That was only after a few days of the program being live and accepting invitations.

I guess I was, Andy.

Are there any more SBA loans through the PPP?

As of right now you cannot apply for a PPP loan with the SBA. However, there could be some good news in our future. Not only did I predict that the program would run out of money (honestly, it wasn’t a tough prediction to make) but I also predicted via Twitter that Congress would both extend the programs timeline and increase the fund.

While this latest prediction has not come true yet I fully expect us to hear that the program has been allotted more funds in the next few business days. Possibly even by Monday. Heck, Congress could have approved it already today and I have missed the announcement.

Here is some of the good news. If you have already received an approval of your application, but the financial institution has not funded the loan yet (i.e. but the money in your bank account yet) then you should be ok. So, what do you do if your business applying for a PPP loan and you haven’t received an approval yet? Or, you hadn’t already applied to the program?

If you had previously applied but have not heard from your lender yet whether you were approved I would give them a today. As soon as possible. If you had not applied at all then you are going to have to wait to see if my prediction about additional program funding comes true.

In the meantime, don’t forget that lenders are still making traditional business loans. Sure, those won’t be at 1% interest and they won’t have the forgiveness clause that the PPP SBA loans have. But when you need it, capital is capital.

My offer

If you are one of many small businesses that is struggling I am here for you. I don’t have a magic wand that can make all your troubles go away. But I have a lot of experience, particularly with entrepreneurship, finance, and marketing, and I’d be happy to see if I can help you work through any challenges you are having.