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Business Education / Entrepreneurship

Apply For A Forgivable PPP Loan In 2021

4/1/21 UPDATE

Three things to know here at the beginning of April:

  • The PPP still has money to lend. Given some of the new rules governing eligibility (including a focus on very small businesses), the available funds have not been exhausted as quickly as they were in 2020.
  • 17hats members (and non-members) are benefiting. As of this writing, Lendio reports that borrowers affiliated with 17hats have already been funded to the tune of $343,000 total. The average loan has been between $7,000 and $9,000.
  • More good news: This newest iteration of the program was slated to expire at the end of March. But recent legislation has extended the application deadline to May 31, 2021.

So read on. And be sure to apply soon – there’s no reason to wait if you’re interested.


Originally published: January 11, 2021

The COVID-19 pandemic has brought economic hardship to many business sectors. Small – often one-person – service-driven businesses have been hit especially hard. That includes many of you reading this.

Worse, the federal government’s efforts to help last spring, through the Paycheck Protection Program (PPP) as part of the CARES Act, failed to help many small businesses. We heard from many 17hats members that they were unable to secure a PPP loan last spring before the program’s budget was tapped out. Several mentioned to us that participating lenders were hard to find.

Still, there is good news here in early 2021, on two fronts.

PPP: Now revamped 

In late December 2020, Congress passed new COVID-19 relief legislation.

As part of the new economic stimulus package, the PPP was revamped. Many of the new and updated rules surrounding PPP particularly favor very small businesses, including one-person businesses, or “sole proprietorships.”

This is a good time to review what a PPP loan does. As the name (“Paycheck Protection”) suggests, these loans are intended to help stabilize businesses hurt by the economic fallout of the pandemic – primarily by replacing payroll and keeping people employed. 

As long as the loan amount is spent on payroll and other allowed expenses, the loan balance is forgivable, in part or completely. A forgivable loan translates to free money, which a lot of small businesses could use these days.

One other thing to know: This latest legislation reauthorizes the Paycheck Protection Program so that business owners who were unable to secure a loan last spring can do so this time. But the stimulus package also budgets money so that small businesses that did take out a PPP loan last spring can apply for a second loan, or “second draw,” whether or not they have repaid their first loan (or applied for loan forgiveness).

We’ve partnered with Lendio to help 

With a PPP loan, you don’t borrow money from the government. While the Small Business Administration sets the rules, you actually get the loan from a lender (a bank, credit union, etc.) in the private sector.

That’s where our new partnership comes in.

We’re proud to announce that we have partnered with Lendio, the nation’s largest marketplace for small business loans. Through this partnership, we can connect our members (and even non-members) with as many PPP lenders as possible. Lendio has long-standing relationships with many of the nation’s top lenders.

Apply for a first or second draw

Between the new legislation and our new partnership with Lendio, there’s opportunity for many small business owners:

If you didn’t receive a PPP loan last spring If you didn’t apply in early 2020, or if you applied but did not receive a PPP loan, you can apply for a “first draw” PPP loan now. Many of the loan’s advantages remain unchanged:

  • Up to 2.5 times your average monthly payroll.
  • Forgivable if funds are spent on payroll (at least 60%) and allowed expenses. If you are a sole proprietor, paying yourself is an eligible payroll expense.
  • 1% fixed APR for any amount not forgiven.

If you did receive a PPP loan last spring If you have repaid your previous PPP loan, or even if you haven’t, you can apply for a “second draw” PPP loan. Highlights to know: 

  • You must demonstrate at least a 25% reduction in revenue because of the pandemic.
  • Once again, loans can be up to 2.5 times your average monthly payroll. (In some hardest hit industries, the cap is 3.5 times average monthly payroll.)
  • Forgivable if funds are spent on payroll (at least 60%) and allowed expenses. If you are a sole proprietor, paying yourself is an eligible payroll expense.
  • 1% fixed APR for any amount not forgiven.

When you are connected with a lender through Lendio’s marketplace, you can work directly with that lender to satisfy the first requirement above – demonstrating at least a 25% reduction in revenue because of the pandemic – based on SBA guidance.

Early guidance suggests that you can satisfy this requirement by comparing your income for any quarter in 2019 to your income for that same quarter in 2020. If you use 17hats Bookkeeping, you can easily generate a Profit & Loss Report for a specified date range. (See this Help Article for details.)  

Apply soon for your PPP loan

There’s reason to act quickly: The Paycheck Protection Program ran out of money last spring, and that could happen again here in 2021.

So, don’t delay – click the button below to start your application with Lendio.

At 17hats, we exist to see small businesses succeed. Connecting you with lenders so that you can benefit from the latest COVID-19 economic recovery package is just another example of that.

This is provided for informational purposes only. Consult with your financial advisor regarding any borrowing decisions.

Frequently asked questions

Q: What is a PPP loan?

A: PPP stands for “Paycheck Protection Program.” Forgivable PPP loans represent one of the ways that the federal government is helping small businesses survive the economic downturn related to COVID-19.

Q: Who is Lendio?

A: Lendio is the nation’s largest marketplace for small business loans. Lendio does not make loans. Lendio brings together borrowers and lenders. In this case, Lendio is connecting small businesses and participating PPP lenders.

Q: Why is 17hats partnering with Lendio?

A: 17hats wants small businesses – not just 17hats members, but all small businesses – to benefit from the government’s assistance. Our partnership with Lendio seeks to connect small business owners with as many participating PPP lenders as possible.

Q: What does “forgivable” mean? Is a PPP loan forgivable? 

A: A “forgivable” loan doesn’t have to be paid back. A PPP loan is forgivable, in part or completely, provided that the loan is spent on certain allowed expenses. (At least 60% of the loan must go toward payroll, for example. If you are a sole proprietor, you still “pay” yourself, and that counts toward your allowed expenses.) Your PPP lender will provide specifics on loan forgiveness, based on guidance from the Small Business Administration (SBA). 

Q: I didn’t take out a PPP loan last spring. Can I apply this time?

A: Yes. The reauthorization of the Paycheck Protection Program at the end of 2020 provides for new first-time PPP borrowers to take a “first draw,” or initial PPP loan. The rules are very similar to the PPP rules during the first round, in the spring of 2020.

Q: I secured a PPP loan last spring. Can I apply for a second loan?

A: Yes. The recently passed legislation allows previous PPP borrowers to take a “second draw,” or second PPP loan, provided they can demonstrate at least a 25% reduction in revenue between 2019 and 2020. Your lender can provide details on substantiating this revenue reduction, based on SBA guidance.

You can apply for a second draw regardless of whether or not you have repaid your first PPP loan, or applied for forgiveness of that loan.

Q: Is there any urgency?

A: Yes. The Paycheck Protection Program ran out of money in the spring of 2020, and that could happen again here in 2021. We encourage you to apply through Lendio now, to give you the best chance of securing a PPP loan.

This is provided for informational purposes only. Consult with your financial advisor regarding any borrowing decisions.

17hats may receive compensation for your use of the Products and Services advertised in this blog through the use of affiliate links.