I’ll be honest, as fast as the first round of PPP financing went, I thought we’d be done with the Paycheck Protection Program by now, but I was wrong. Last night (May 3, 2020) the SBA Administrator, Jovita Carranza and Secretary of the Treasury, Steven Mnuchin, announced that the second round of PPP funding amounts to just a little over $175 billion so far. Meaning it’s possible that there’s still time to apply for a PPP loan.

What’s more, of the 2,211,791 small business loans so far delivered, roughly 70% of those loans were in amounts under $50,000 with an average loan size of $79,000. I’m encouraged by this because it indicates that a significant amount of these funds are getting into the hands of the smallest small businesses.

According to Administrator Carranza and Secretary Mnuchin, “Since Round 2 of PPP loan processing began on April 27, 2.2 million loans have been made to small businesses which surpasses the number of all loans made in PPP Round 1. The total value of these 2.2 million loans is over $175 billion. Notably, the average loan size in Round 2 is $79,000, yet another indicator the program is broadly based and assisting the smallest of small businesses.”

I was also happy to see that 53% of the lenders making loans in Round 2 were smaller banks and about $27 billion of approved dollars were from non-banks including CDC’s, Microlenders, Farm Credit Lenders, and FinTechs. These are the lenders that are closest to Main Street and more likely to make these smaller-dollar loans to the small businesses that need the most help getting through the crisis caused by COVID-19.

What Does This Mean for Your Small Business?

The news today is good. It looks like the SBA’s admonition that larger businesses need not apply has been reasonably successful. Nearly 90% of Round 2 PPP loans (as of yesterday) have been for $150,000 or less. Meaning if you have an application waiting—or maybe even if you haven’t finished your application yet—there is a good chance your loan could be funded.

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I have long felt that the biggest challenge Main Street has when it comes to financing is not that they ask for too much, but that they don’t ask for enough—causing them to be ignored by the bigger banks when they apply for financing.

Slow and Steady Doesn’t Win this Race

If, for some reason, you have a loan application in process with a lender that you haven’t completed you may still have time to get your application finished and your loan approved. You have no time to waste and should be working toward completing your application as soon as is humanly possible.

If you were convinced that only the biggest small businesses would be approved, and applying would be a waste of time because all the PPP funds would be gone by now, it looks like you could be wrong—it looks like there’s still time to apply for a PPP loan. If you act quickly, there may still be time to get a PPP loan application submitted and approved before this round of financing dries up.

“Since the launch of PPP on April 3, 2020 SBA has processed over 3.8 million loans for more than half a trillion dollars of economic support in less than one month,” says Carranza and Mnuchin. “We are fully committed to ensuring that American workers and small businesses continue to get the resources they need to get through this challenging time.”

We will keep you up to date with timely and candid updates regarding the PPP program as new information becomes available so you can make informed decisions regarding the impact on your businesses.

Please keep in mind this information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions. We encourage you to consult with your lawyers, CPAs and Financial Advisors. To review your real-time funding options with one of Nav’s lending experts, please contact us.