The COVID-19 pandemic hit hard and fast, leaving many business people reeling. From full closures due to government mandates to sudden changes in operations, businesses have had to maneuver quickly to have their doors open and their employees within the company. Relief with the Small Business Administration’s Paycheck Protection Program (PPP) has helped thousands and thousands of businesses in the usa stay afloat during these trying times.
When you are looking at PPP loans, time is of the essence. Business people must apply quickly to secure loans prior to the money is exhausted. But there’s another timeline that financially-strapped business people don’t have control over: when loan funds is going to be disbursed. Actually, people are asking we’ve seen lately happens when will PPP loans be funded? Well, look no further because we've the answer!
In this informative article, we’re going to help you to get a concept of when will the PPP money be distributed. Different lenders have different policies, some businesses may face delays, and not every loan timeline will be identical. However, we’ve checked out lender policies, SBA guidelines, and comments and complaints from business owners just like you to help determine the timeline for PPP loans, from the moment you submit your application to loan disbursal. Whether you’re not-so-patiently waiting to receive your loan or you’re still weighing the advantages and disadvantages of trying to get a PPP loan, continue reading to explore the PPP funding timeline.
What Is The PPP Loan Funding Timeline?
The time that it takes to accomplish and get approval for your PPP loan application varies by lender. Once approved, the SBA requires lenders to disburse funds within 10 calendar days. Your loan is considered approved when the SBA assigns a loan number.
In general, the PPP loan funding timeline is around two weeks, from the time you submit your application to the time the lending company disburses funds. Note that this timeline may vary with different number of factors, such as the lender you select and whether additional information is needed to process your application.
PPP Funding Timeline: From Application To Loan Disbursal
A general timeline for receiving your SBA funds is around fourteen days generally. Let’s break down each step of the PPP process so you are aware what to expect.
PPP Application
The initial step to securing your PPP loan is to complete the loan application with a PPP-approved lender. The SBA includes a PPP lender search tool which makes it easy to find your lender. You may also check out our list of top online PPP lenders.
If you haven’t previously received a PPP loan, you'll fill out the very first draw PPP application. This application is comparatively straightforward and shouldn’t take long to accomplish. Along with the application, you’ll should also submit documentation. Paperwork requirements vary by lender but can include tax forms, payroll records, and documentation showing a reduction in gross receipts.
If you have previously received a PPP loan, you'll complete the second draw application. This application is also fairly straightforward and simple to complete. Additional documentation requirements vary by lender.
This step from the process isn't very difficult, particularly if you curently have all of your documentation in order. Overall, expect this step to consider between around 15 minutes for an hour. Once the lender receives the application and documentation, the next thing is waiting for your loan approval.
Loan Approval
When everything has been submitted to the lender, the next thing is for that lender to submit these details to the SBA. This is done with the SBA’s E-Tran system, a web-based portal which has shortened the approval time for SBA loans.
This system makes it quicker and easier to get SBA loan approval, however it isn’t without its flaws. A large number of applications coming through the system have resulted in some delays. While it is possible to get approval in a day approximately, these potential delays could extend your funding timeline.
According to many participants in the first round of PPP loans, the largest delays were seen across larger banks and financial institutions which were processing thousands of applications. However, many borrowers that used smaller lenders reported faster approval times.
While you may receive approval as soon as a couple of days after submitting the application to your lender, remember that there might be unavoidable delays. Talk to your lender about loan approval times, and find out how updates are provided about your loan’s status. This might include logging into your online account or receiving an e-mail with your loan number.
Expect this method to take about a week, although, again, there might be delays. If you haven’t heard back from your lender within their estimated timeline, consider calling the lending company or sending an e-mail to find out about your loan’s status.
Processing & Account Deposit
Once your loan continues to be approved, your lender will begin processing the loan before money is put into your bank account. Per the SBA, “a loan is recognized as approved once the loan is assigned a loan number by SBA.”
The SBA further clarifies how long the lending company needs to disburse funds: “The lending company must create a one-time, full disbursement from the PPP loan within ten calendar times of loan approval.”
So if your loan was approved last month 8, the lending company has until February 18 to disburse your funds. If you do not have loan funds inside your account in line with the 10-day timeline, speak to your lender to make sure that there weren’t any problems, such as an incorrect bank account number.
One last thing to understand is that some borrowers reported frozen accounts or holds placed on their PPP funds. Should this happen to you, speak to your bank immediately to find out the following steps. In some cases, you may be in a position to possess the hold lifted or the account unfrozen by providing the loan documents, proof of identity, and other documentation.
When To Expect PPP Funds: Final Thoughts
The big question here's this: How long until PPP loans are funded? Every PPP loan is different, so it’s not necessarily easy to determine when to expect PPP funds to arrive in your bank account. Fortunately, you will find SBA guidelines in place to make sure that you receive your loan promptly. From start to finish, the process typically takes about fourteen days, even though some borrowers are experiencing funds quicker . As long as you stay involved in the process, connect with your lender, and understand how the PPP loan process works, you ought to be seeing your money very quickly whatsoever. Good luck!
