How to Navigate the PPP Loan Process so It Turns Out As You Planned

The hanky-panky surrounding the first and second round of PPP last year led the SBA to tighten screening for fraud in the process for 2021. The result is snafus that hold up application processing. How does a business cope with this minefield?

Let’s look at the process that has three choke points. Most lenders use a computer system to submit your application to the SBA. The SBA runs a validation check, and applications halt here if they don’t pass muster.

Validated applications go to SBA underwriting. About 20% of applications generate errors, as many as forty different ones, that flag them for more documentation. Your lender has to figure out the error code and the solution.

In the third phase, the SBA reviews the application and decides whether to give it an E-Tran number within 48 hours. The E-Tran number greenlights funding.

The good news is about 70% of loans are flowing through the process without significant problems. There’s money allocated especially for businesses with ten or fewer employees, minority and underserved businesses.

Funds ran out quickly for the first two rounds, so apply as soon as possible. This third round ends May 31, 2021, or until funds run out. Download the application through the SBA website, and work with an SBA-approved lender.

Documentation errors cause the most delays, so assemble comprehensive documents. These include payroll records, 2019 and 2020 tax returns, your company’s legal structure, and how COVID affected your business. The more detailed your records and documents, the likelier you will receive a loan.

Author: Kris Keppeler, a writer who finds technology fascinating and loves humor. She writes for Crossing Genres on Medium.com and Does This Happen to You? on Channillo. Award-winning podcast producer who enjoys telling stories. Follow her @KrisKKAria on Twitter or on LinkedIn.

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