I Got Rejected from the PPP. What Now?

By Owen Yin on August 12, 2020

If you were rejected, disqualified, or otherwise missed out on this program, there are still several PPP alternatives to look into, updated as of August 2020.

EIDL

The SBA Economic Injury Disaster Loan (EIDL) loan program specifically serves people affected by natural disasters in the U.S. For COVID-19 relief, all small businesses, including sole proprietors and independent contractors, can apply. Applications are being actively processed, so we recommend starting an application today.

How much can I borrow?

You can borrow up to $2 million if your business is physically affected by a disaster (such as COVID-19, or a hurricane, earthquake or some other form of economic injury). However, the media is widely reporting that the SBA has capped loan amounts to $150,000 due to overwhelming demand (though the SBA has not publicly confirmed this).

If you qualify, the interest rate for an SBA disaster loan is 3.75% for businesses, and 2.75% for non-profit organizations. SBA loans have fairly long terms—generally 15 to 30 years—in order to make them affordable for small businesses.

What can I spend the money on?

Unlike the PPP, you can spend the funds on any working capital expenses related to running your business! You can even combine it with the PPP as long as you don’t spend it on the same things as the PPP.

How do I apply?

You can apply through the SBA’s online portal. Here’s our guide to completing the form.

Unemployment benefits

Under the new Pandemic Unemployment Assistance (PUA) program, self-employed folks are now eligible for unemployment benefits.

That means if your business doesn’t qualify for a PPP loan, you and your employees can still receive regular, sizable payments to get you through these difficult times.

To learn more about what unemployment benefits you (and your employees) can qualify for, check out our guide on unemployment benefits and COVID-19.

Preparing for future relief programs

A common theme we saw in businesses that had trouble getting a PPP loan was not having the right tax documents and financial records ready. If you haven’t completed your taxes for 2019 yet, this should be your top priority, especially because the filing deadline has passed and penalties are starting to accumulate. At Bench, we can help you get caught up on overdue books fast, and connect you with tax professionals to help you resolve your tax situation with the best possible outcome. Learn more.

Once you have an accurate tax return and up-to-date financials, you’ll be prepared for any future relief programs that may be introduced. (Plus, the sooner you file your return, the sooner you’ll get your tax refund.)

So if you want to position your business to take full advantage of any relief programs, the best thing you can do today is to get your bookkeeping and taxes taken care of.

If you don’t have a bookkeeping and tax solution in place today, Bench can help. We’ll get your 2019 books caught up for a flat rate, and we’ll get your taxes filed too. Learn more with a free consultation.

Support from government

The employee retention tax credit

You can be eligible for payroll tax credits if you keep your employees on payroll, if you paid COVID-19-related sick leave for employees, or if you had to suspend operations.

Further reading: Employee Retention Credits: A Simple Guide (COVID-19)

Community Advantage Recovery Loan

This program is designed to provide additional support to small businesses in underserved markets, such as new businesses and those located in low-to-moderate income communities. Qualifying lenders will provide at least 15 hours of assistance to help your business through the impacts of COVID-19. The SBA will cover the costs associated with the technical and financial advice. This program has not yet launched.

The Express Bridge Loan

You can borrow up to $25,000 for disaster-related purposes from a lender you have an existing banking relationship with.

Further reading: The Express Bridge Loan Pilot Program (A Simple Guide)

SBA Microloan

The SBA’s microloan program is designed for very small businesses such as sole proprietors and freelancers to obtain loans of up to $50,000. You can use microloan funds similar to how you can use an EIDL loan. New microloans qualify for six months of payment coverage from the SBA as part of the CARES Act stimulus package.

Small Business Development Centers

These locations are administered by the SBA and are a resource you can consult for training and consultation on all aspects of small business management. They can also help you identify grants to apply for. There is at least one center in every state.

Support from large businesses

Many large companies have stepped up with resources and funding for small businesses affected by COVID-19.

Google Ad Credits for Small and Medium-sized Businesses

Google is providing ad credits to small and medium businesses that advertised on Google in 2019. Credits will be added automatically.

Lawyers for Good Government Foundation

Virtual clinics are being established for small businesses to connect with law firms and non-profit organizations for pro bono consultations on legal issues due to COVID-19.

LISC Grants

The Local Initiatives Support Corporation has partnered with Lowe’s to provide $20,000 grants to small businesses, with a focus on those owned by minorities and women as well as those in rural communities.

Regional support

There are many region-specific supports and resources offering emergency funding. There are too many to list here, but we recommend checking with your local chamber of commerce, economic development office, or nonprofit groups for relief programs.

Our partners at Gusto have been compiling a database of grants and other relief programs available in your state.

Further reading: COVID-19 Resources, State by State

Support for your industry

Your industry organization may offer grants and specialized support. Here are a few active funding sources:

CERF+ Emergency Assistance

Up to $3,000 in grants to established artists working in a craft discipline.

Support for self-employed individuals

Federal Stimulus Checks

The federal government is providing up to $1,200 to eligible individuals. You can check the status of your payment at the IRS Get My Payment site.

Pandemic Unemployment Assistance

Self-employed individuals and independent contractors are eligible for unemployment benefits if they find themselves unemployed, partially unemployed, or unable to work due to COVID-19. Visit your state’s Department of Labor site to apply.

Further reading: Unemployment Benefits and the CARES Act

The Workers Fund

Rapid funding for gig and contract workers.

One Fair Wage Emergency Fund

Emergency funding for service and gig workers.

Support from vendors

Your vendors, especially technology and IT vendors, may be offering financing options with low or no interest rate. Communicate with your vendors to set up deferred payment plans to increase cash flow.

Private lenders

Banks, merchant processors, and other private lenders may offer lines of credit or other lending options. Just note that some of the below offers may have been changed due to COVID-19.

Traditional bank loans

We’ve compiled our recommendation of the best bank loans for small businesses in 2020.

Business line of credit

A line of credit is more flexible than a bank loan, and usually cheaper too. Here’s our recommendations of the best business lines of credit in 2020.

Business credit card

Using a credit card to float your business is usually a bad idea. However, some business credit cards offer 0% interest for the first year. Check out our recommendations for the top business credit cards to see if any fit your needs.

Unavailable funding sources

Funding for these grants has run out, but we’ll keep a list here in case applications reopen.

The Save Small Business fund

The Save Small Business fund is a grant made available by the U.S. Chamber of Commerce and supporting partner companies. It provides $5,000 to small businesses with 3–20 employees.

  • $5,000 grant

  • Applications open April 20, 2020 at 12PM PDT

  • Requires W-9 form

  • Your business must be located in an economically vulnerable community. You can enter your business’s zip code on the site to see if you qualify.

Verizon Small Business Recovery Fund

Verizon partnered with the nonprofit Local Initiatives Support Corporation to provide grants of up to $10,000 to impacted businesses, with a focus on entrepreneurs of color, women-owned businesses and other enterprises in historically underserved communities.

Facebook Small Business Grants Program

Facebook provided cash grants and ad credit to small businesses with 2–50 employees.

  • Must be a for-profit company that has been in business for over a year

Salesforce Care Small Businesses Grant

$10,000 grants for small businesses who have been in operation for at least 2 years and have annual revenue between $250k and $2M.

Restaurant Employee Relief Fund

The National Restaurant Association Educational Foundation provided grants of up to $500 for impacted employees. Food delivery workers (such as those who work with Uber Eats and Doordash) were eligible.

The Photographer Fund

Format provided up to $500 in grants to impacted photographers.

Beauty Changes Lives

$1,000 grants for impacted beauty professionals or students of beauty programs who must not be currently earning an income.

Freelancers Relief Fund

Up to $1,000 in grants for freelancers experiencing financial or health hardship as a result of COVID-19. Applications are temporarily closed.

More COVID-19 resources


This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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