Editor’s note: On Tuesday, May 4th the PPP ran out of general funds and the SBA stopped accepting new PPP loan applications. A reserve of funds is still available for community financial institutions that lend to businesses run by women, minorities, and underserved communities. Additionally, a reserve of funds remains for applications previously submitted but not yet reviewed by the SBA. If you have already submitted your loan application, however, this does not guarantee you funding.
If you were surprised at the PPP loan amount you received, is there anything you can do about it?
Maybe you’re worried that the amount is too high and you won’t be able to spend it all and get it forgiven. Or, worse, that your loan is too small and won’t cover your costs.
Unfortunately, there is no official SBA guidance on these questions. So we talked to a few trusted PPP lenders to get their perspective on this problem.
My PPP loan is too small. What should I do?
If your loan offer is too small by your calculations, you’ll need to speak with your lender directly (not the SBA), which will likely require an escalation.
Unfortunately, once you’ve signed loan documents, there is little else you can do.
You are welcome to return the funds in full, as long as it’s before May 18. However, you will likely not be allowed to apply for another PPP loan—each business is only allowed to receive one PPP loan. You can speak to your lender to start the process of returning your loan.
If you don’t want to return the funds in full, you can speak with your lender, who may be able to work something out with you. However, this is somewhat unlikely, due to the fact that your lender is the one who finalized your loan amount and sent it to the SBA for approval. The SBA then either approves or denies the loan. Meaning, you will effectively be asking your lender to change their decision, once they’ve already had their decision approved by the SBA. And once it’s been approved, there doesn’t seem to be anything more the SBA can do.
Get additional funding outside the PPP
If your PPP loan amount is too small to cover your costs, there are still plenty of funding options outside of the PPP.
Some of the best options include:
- Unemployment benefits (you will have to report your PPP loan as income to your state unemployment office which may make you ineligible for unemployment benefits)
- Small business loans
- Business lines of credit
My PPP loan is too big. What should I do?
If your loan was too big and you’re nervous about not being able to spend it correctly and get it forgiven, you can return the funds in full. The SBA has given a grace period allowing you to return the funds before May 14 without any penalties.
If you just want to return a portion of the loan, unfortunately that doesn’t appear to be an option. You can either accept the amount that’s been given to you, or return the funds entirely.
If you’re concerned about your large loan size, your only course of action is to speak with the lender who provided the loan—they may be able to work something out with you, but there are no guarantees. We also recommend sending your lender an email as soon as you realize your loan is too big. That way you have a legal paper trail showing that you had concerns, which may help your chances of leniency and forgiveness later on.
If you end up with excess funds you can’t immediately return, we recommend holding it in your business bank account so you can pay back the funds as soon as the repayment process has been finalized.
Either way, if you’re concerned your loan size is too big, the safest thing to do is to not spend the excess funds.
I haven’t applied for the PPP yet. How do I make sure I get the right amount?
We recommend three basic steps to making absolute sure you’re requesting the right PPP loan amount:
Read our guide to calculating the PPP loan amount.
Calculate your loan amount based on your business type.
Ask your lender to confirm the PPP loan amount with you before they submit it to the SBA for approval. This is the only chance you’ll get to correct the amount.
I got two PPP loans. What do I do?
Some business owners have reported receiving funding from multiple banks due to having multiple PPP applications. This is likely a lender mistake, as there should only be one SBA loan number assigned to your tax ID. If you received duplicate PPP loans, you should contact your lender immediately and avoid using the duplicate funds.
Senator Marco Rubio, the chair of the Small Business Committee, has indicated that you will not be penalized for having duplicate loans if you are transparent about the error.