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It's your last chance at a PPP loan. Here's how to apply

·3 min read
A billboard displays an advertisment for PPP loan assistance in South Central, on April 15th, 2021. (James Bernal for the Reveal/LA Times)
A billboard in South Los Angeles advertises PPP loan application assistance. (James Bernal for Reveal / Los Angeles Times)

Time is running out for small-business owners looking to get a government Paycheck Protection Program loan.

Applications for the final round of PPP loans will be accepted only until Monday or until the remaining funds are drained, whichever is sooner.

Most of the money is already gone. As of Friday, only about $3 billion was left of the $800 billion provided for the program, according to congressional staff. The Small Business Administration has approved more than 11 million of the loans over the course of the program.

In these final few days, the SBA is offering PPP loans only through participating community financial institutions.

Here's what you should know if you're looking to apply.

Apply now

Even though the deadline is Monday, some lenders have stopped accepting applications to give themselves time to process the ones they've already received. Prospective borrowers can find participating lenders through the SBA website.

"You want to try to give any organization as much time as possible right now to process your request," said OC Isaac, senior vice president and chief credit officer at Pacific Coast Regional Corp., a small-business development center and community development financial institution in Los Angeles' Koreatown neighborhood that stopped accepting PPP loan applications Friday. "You have to give the lender the opportunity to review your materials, approve your loan request internally and then submit it out to the SBA for approval."

Gather your documents

Potential borrowers should gather all the documentation they need to complete the application. For independent contractors and sole proprietors, that includes a 2019 or 2020 IRS Schedule C business tax form, Isaac said. Businesses with employees should have their IRS Forms 940 and 941, as well as an internal payroll summary report to show the lender, he said.

Applicants also should have their business bank account information ready to speed up the loan funding process if they are approved.

"Make sure that the information that you are providing to the lender is ultimately accurate and true," Isaac said. "You’re attesting to that fact when you’re applying."

Ask for help if you need it

Community development financial institutions, known as CDFIs, and small-business development centers are available to help business owners who have questions about applying for loans. Vermont Slauson Economic Development Corp., a CDFI in South Los Angeles, has walked business owners through the process, as well as ensuring that their accounting systems and new business models are resilient, said Delores A. Brown, a financial consultant there.

"The business model that sustained them prior to the pandemic may not be the business model that is going to create any sustainability moving forward," she said.

Vermont Slauson is also referring clients to partner organizations that are accepting PPP loan applications, she said.

Pacific Coast Regional has also referred loan applicants to partner lenders and provided business owners with information on other available financial programs, Isaac said.

Keep records

PPP loans are designed to be forgiven, so small-business owners who are approved for a loan should try to meet the criteria for forgiveness, Isaac said. That means spending the PPP money on eligible expenses and keeping documents that verify what those expenses were.

"Prepare yourself today so you don't have to worry about it on the back end," he said. "The thing I would hate most is for these small businesses ... [to] have to pay a federally backed loan and ultimately be in a position where they could default," especially given the difficult financial times now.

Times staff writer Don Lee contributed to this report.

This story originally appeared in Los Angeles Times.