Earlier today, President Donald Trump signed into law the H.R. 266 or the “Paycheck Protection Program and Health Care Enhancement Act.”
The law adds about $500 million in funding to the Paycheck Protection Program (PPP) under the previously approved CARES Act. The PPP provides payroll support to SMEs that start as low-interest-rate loans but can be forgiven if the business maintains payroll. The theory is that by helping smaller firms keep their doors open and employees being paid the PPP will end up costing less than more massive unemployment and inevitable bankruptcies.
Lendio, a Fintech that has already facilitated over 70,000 PPP loans, quickly issued a statement warning SMEs to hurry as they expect an “even higher volume of new applicants for this second round of relief.” Lendio predicted that like the first round, this money too will soon run dry.
To quote the platform:
“As was the case in the first round, we will NOT be able to get every applicant approved. We encourage small business owners that have access to PPP funding through their banks to seek help there first, so that we can focus on helping the significant portion of small business owners that do not have any other way of getting funded.
We believe that this next round of PPP funding will go very quickly. That means we have to prioritize PPP applications that are 100% complete and can be received and processed by our lending partners with as little manual intervention as possible. To maximize their ability to approve PPP loans, many of our lenders have created automated processes for reading the most frequently-used payroll verification documents like Forms 940, 941, and 944. If you are able to include these documents in your application, it may improve our ability to quickly match you with a lender.”