Ethan Riley
The Small Business Administration's (SBA) Paycheck Protection Program (PPP) provides loans to small businesses impacted by the COVID-19 pandemic. PPP loans are available through various banks, credit unions, and online lenders, with eligibility and application requirements varying across providers. While some banks prioritized existing customers for PPP loans, others accepted applications from new customers. As of May 2021, several banks were still accepting PPP loan applications, including Wells Fargo, Bank of America, Bank of the West, and Atlantic Capital Bank. However, it's important to note that this information may not be current, and it's always best to check with individual banks to confirm their acceptance of PPP loan applications. Additionally, the PPP application portal stopped accepting applications from most lenders on May 24, 2021, and the program formally ended on May 31, 2021. However, some sources indicate that certain lenders may still have PPP funding available, and the SBA continues to process forgiveness applications.
| Characteristics | Values |
|---|---|
| Date | As of May 2021 |
| Number of banks accepting applications | A few |
| Types of banks accepting applications | Large banks, community banks, online lenders |
| Customer type | Existing customers, new customers |
| Application method | Online portals, in-person |
| Application status | Applications are open |
| Application processing time | Varies, some banks have a backlog |
| Application requirements | Vary across providers, some require business accounts |
| Loan amount | Varies, depends on payroll costs |
| Interest rate | 1% |
| Loan maturity | 2 years for loans before June 5, 2020; 5 years for loans after |
| Eligibility | Small businesses with ≤300 employees, demonstrating ≥25% reduction in annual receipts in 2020 vs 2019 |
| Forgiveness | 100% of the PPP loan, including principal and interest, is eligible if funds used per SBA guidelines |
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What You'll Learn
Banks prioritising existing customers
The Paycheck Protection Program (PPP) has been a source of confusion and frustration for many small business owners. While some large banks, like Wells Fargo, have been accepting PPP applications from existing customers with business accounts, others have been declining applications from those without prior relationships with the bank. This has resulted in lawsuits alleging preferential treatment for existing customers.
In the face of criticism for prioritising existing customers, banks have been trying to balance financial crime compliance duties with the need to support desperate businesses. The latest guidance from the U.S. Treasury attempts to find a middle ground, allowing institutions to devote fewer resources to current corporate customers. For example, banks are not required to re-verify beneficial ownership information for PPP loans to existing customers, reducing the amount of paperwork and speeding up the process.
Some banks have also been accused of giving preferential treatment to larger companies. This, combined with the perception of large corporations receiving millions in PPP funds at the expense of small businesses, has led to concerns about regulatory scrutiny and potential lawsuits.
To avoid these issues, business owners are advised to apply for PPP loans through the firm they usually bank with, as most large banks are only accepting applications from existing customers. Additionally, online lenders have processed a disproportionate share of loans to Black-owned firms, accounting for over half of all PPP loans to Black-owned businesses.
While some banks are still accepting new applicants, it is recommended that individuals apply through their own business banker to increase their chances of success.
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Online lenders
BlueVine is a direct non-bank lender that will accept applications from any small business interested in applying for a PPP loan for first or second draw loans. Existing BlueVine customers will be contacted when their PPP loan application is ready. PayPal is also approved by the SBA as a non-bank lender and is accepting applications for PPP through its LoanBuilder.com site with WebBank as the lender. Lendio is another online lending marketplace that has partnered with multiple lenders, including a loan origination software and services partner. They are accepting applications for first and second draw PPP funding through their partner SmartBizLoans.
Fundera is a popular matchmaking service that pairs applicants with lenders from its pool of partners. They can direct your application to the lender with the most bandwidth to process your application. Funding Circle is another online marketplace that connects investors with small businesses seeking loans and is now accepting PPP applications for both first and second draw loans.
Some online lenders are not yet accepting applications but will be soon. For example, SmartBiz is a leading online lender offering SBA and bank loans and simplifying the application process. They are not accepting applications for the new round of PPP funding yet, but they have a downloadable prep list of documents you will need to apply and you can sign up to receive an alert. Similarly, Credibly is a popular online small business lender that participated in the first round of PPP loans and will participate in the 2021 round, but they are not accepting applications just yet.
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Applications from new customers
As of 2021, some banks were accepting PPP loan applications from new customers. Here are the details for each bank:
Ameris Bank
Ameris Bank is accepting PPP loan applications from new customers based in Alabama, Florida, Georgia, North Carolina, and South Carolina. The bank is accepting applications for PPP loans of $50,000 or less via its website.
AltCap
AltCap, a CDFI focused on serving small and minority-owned businesses in the Kansas City area, is accepting applications for first and second PPP loans on its website.
Cathay Bank
Cathay Bank is accepting PPP loan applications from new customers located in California, Illinois, Maryland, Massachusetts, New Jersey, New York, Nevada, Texas, and Washington. New customers will be required to open a business checking account with the bank prior to completing the application.
BMO Harris
While BMO Harris is primarily accepting applications from existing customers, first-time PPP borrowers can contact their local BMO Harris branch for assistance.
Chase
Chase is accepting applications for first and second PPP loans through its website. New customers need to be willing to open a Chase business checking account to be eligible to apply.
Compeer Financial
Compeer Financial, a member-owned Farm Credit cooperative, is currently accepting PPP applications from new customers on its website.
Additional Options
Some third-party FinTech companies, such as PayPal and QuickBooks, are also accepting PPP loan applications from new customers. Forbes has created a list of participating banks and FinTech companies, which it updates regularly.
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Loan forgiveness
The Small Business Administration (SBA) offers loan forgiveness for Paycheck Protection Program (PPP) borrowers. To be eligible for PPP loan forgiveness, borrowers must use at least 60% of the loan to cover payroll within 8 or 24 weeks of receiving the loan. Borrowers can apply for forgiveness at any time up to five years from the date the SBA issued the loan number. If borrowers do not apply within 10 months after the last day of the covered period, loan payments are no longer deferred, and borrowers must begin making payments to their PPP lender.
Beginning in March 2024, borrowers can use the SBA's Direct Forgiveness Portal (DFP) to apply for forgiveness, regardless of loan size. The application process can be completed in as little as 15 minutes, and borrowers will be asked questions corresponding to those on SBA Forms 3508, 3508EZ, or 3508S. Lenders can still accept PPP forgiveness applications directly, and borrowers should refer to their chosen forgiveness form for detailed instructions on required documentation.
SBA Forms 3508 and 3508EZ require borrowers to provide additional documentation upon submission, including bank account statements or third-party payroll service provider reports documenting cash compensation paid to employees, and tax forms or equivalent third-party payroll service provider reports for overlapping periods. Form 3508S does not require additional documentation upon submission, but borrowers should be prepared to provide relevant documentation if needed.
The SBA offers free counseling and training events to help borrowers with the PPP loan process and loan forgiveness applications. The SBA also provides procedural notices and guidance on various topics related to PPP loans and forgiveness, including lender submission of forgiveness decisions, changes in ownership of PPP borrowers, and borrower resubmissions of loan forgiveness applications.
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Alternative banks
As of 2024, the Paycheck Protection Program (PPP) is no longer accepting applications. However, here is some information about alternative banks and lenders that may be of use for future reference.
Some large banks have been reported to decline PPP applications unless the business owner has had a prior relationship with the lender, such as a previous loan or credit card. However, this is not always the case, and some larger banks are starting to accept new customers. For example, Wells Fargo was accepting applications from those with a business account with them.
Some alternative options to large banks include regional and local banks or credit unions, which may be more willing to accept your application even without a prior relationship. Small banks, in particular, can be beneficial as you can talk to a loan officer who will advocate for you to the loan committee.
Online lenders and FinTech options, such as BlueVine via Nav, Kabbage, LoanBuilder by PayPal, and Lendio, are also worth considering. These lenders processed a disproportionate share of loans to Black-owned firms, accounting for over half of PPP loans to Black-owned businesses.
Additionally, Community Development Financial Institutions (CDFIs) are listed as PPP lenders, but some have reported difficulties in applying through these institutions.
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Frequently asked questions
As of May 2021, several banks were accepting applications for the Paycheck Protection Program (PPP) from new customers. However, it's important to note that this information may not be up to date, and it's recommended to check with individual banks. Some banks that were accepting applications as of May 2021 include Bank of the West, BBVA USA, and Bank of America.
While some banks prioritized existing customers for PPP loans, others accepted applications from new customers. It's recommended to review the specific requirements and eligibility criteria provided by the lender and the SBA before applying.
You can find a list of financial institutions that may have PPP funding on the SBA website. You can search by your zip code or state to find eligible lenders in your area.
You can apply for a PPP loan through your bank or an approved lender. The Paycheck Protection Program Borrower Application Form is simple and should take less than 20 minutes to complete if you have all the required information ready.
