Is there still money?
Roughly $130 billion of the $670 billion set aside for the PPP remains unclaimed. It took less than two weeks to deplete the original $350 billion in PPP funding, but demand was weaker after Congress allocated additional money to the program.
In addition, more than 170,000 loans totaling about $38.5 billion have been canceled as of May 31, according to a report issued June 25 by the U.S. Government Accountability Office. Some borrowers gave back their loans after the Treasury Department said public companies and others with alternative sources of financing shouldn’t tap the PPP; others returned funds because they didn’t feel they could meet the program’s original spending requirements because, for instance, their business remained closed.
Changes in eligibility
Relaxing of criminal history requirements.
The administration has relaxed some restrictions that made it difficult for people with prior criminal records to qualify for a PPP loan. Under the changes, a business can’t apply for a PPP loan if an owner with at least a 20% stake in the business was convicted, pleaded guilty, pleaded no contest or commenced parole or probation for a nonfinancial felony in the past year. Before the change, the look-back period was five years for nonfinancial crimes, the same as for embezzlement, fraud and other financial misdeeds. Businesses can also now apply for a loan if an owner was indicted on a misdemeanor charge, though restrictions remain for those indicted on a felony charge.
Finding a lender
Shouldn't be a problem anymore.
Roughly 5,500 lenders have originated PPP loans, according to the SBA, a list that has grown as more banks, fintech lenders and community-development financial institutions have been approved for the program.
JPMorgan Chase & Co. and Bank of America Corp. are among the banks that expect to resume making PPP loans once the program restarts, though they aren’t sure of the timing. Banks cleared their loan pipelines in anticipation of the program’s end, which should make it easier for them to handle new applications.
But some lenders don’t expect to resume taking loan applications. “There’s going to be a significantly smaller number of lenders participating in Round 3,” said Mr. Wilkinson of the lending trade group.
No employees? no problem.
Self-employed individuals, independent contractors and sole proprietors are all eligible for the PPP, even if they don’t receive an actual paycheck. For those businesses, the loan amount is tied to the net profit (or loss) for the business, as reported on Line 31 of Schedule C in 2019, even if they haven’t actually filed their tax return.