Paycheck Protection Loans, How to Qualify and Apply

Paycheck protection loans, or SBA loans, are one of the initiatives undertaken by the federal government to help businesses combat the economic effects of the health crisis.

What is a Paycheck Protection Loan?

These loans are designed to help cushion the blow to small businesses from the economic impact of the coronavirus. Sole proprietors, independent contractors, and self-employed persons are also eligible for these loans. A business must meet the SBA’s size standards, which vary by industry, for a small business to qualify. Some of the unique features of these loans are the following.  

  • The payment is intended to keep workers on payroll and help businesses pay for necessary expenses like rent, mortgage payments, or utilities.
  • The loan will be fully forgiven if the funds are paid for such necessary expenses and if at least 75% of the funds goes towards payroll for eight weeks. 
  • If businesses do not pay at least 75% of the funds towards payroll, or if its headcount or wages paid decrease –  it will not be eligible for full loan forgiveness. 
  • If the loan is not eligible for forgiveness, it will need to be paid back in two years at 1% interest rate. Loan payments will be deferred for six months. Aside from the 1% interest rate, there are no additional fees, collateral, or personal guarantees required. 

Did the SBA Stop Accepting Applications? 

There was a short period of time where applications were closed, April 16 – April 26. At the time of this writing, you can apply for an SBA loan

Applications for the loans are assessed on a first come first serve basis. 

The SBA Approved More Funds on April 23, 2020

The House of Representatives approved an additional round of funding for Paycheck Protection Loans on Thursday April 23. The initial round of funding contained $350 billion in relief aid; however, this second round is expected to be slightly lower at $320 billion.

Lenders we able to resume processing loans on April 27, 2020. 

How to Apply for a Paycheck Protection Loan? 

If you meet the loan requirements and you are ready to apply, the first step is to gather your paperwork and get in touch with an approved lender. 

Click here to find approved lenders

Remember you must have the proper documentation easily accessible and be able to share these documents with your lender quickly.

Once you start the process, you have 10 days to close the loan. Not only is there a time limit on completing your loan application, but the funds are dispersed on a first come first serve basis and you do not want to miss out on funding. 

What Should You Do if You Didn’t Qualify?

If you didn’t qualify for an SBA loan, you might still qualify for other lending options. 

In the meantime, it’s important you get in touch with your creditors, mortgage and utility providers and any other vendors to let them know your situation. A lot of companies are being flexible at the moment and it would be useful to ask your providers if they can offer you any leeway.

You might be able to postpone certain payments – but only do so if it is absolutely essential.

At the same time, cut down on any unnecessary expenses you can. Canceling recurring orders, minimizing advertising, and reevaluating your insurance plans are just some of the things you can do to help lower costs. 

Make sure to keep your staff updated on the ongoing situation. You might have to start cutting hours, even if your team is already working remotely, and it’s best to be transparent when doing so. You might also want to consider hiring freelancers to help with certain tasks if you cannot afford to keep full-time employees on payroll.

Sites like and offer a host of freelance services. 

Finally, learn why you didn’t qualify for an SBA loan in the first place. It’s possible that there may have been an easily correctable mistake on your application.

You may be able to submit when a new round of funding is available. Either way, it’s important to know why you didn’t qualify so you can better understand what your options are for emergency funding. You can also read up on other national assistance programs and relief funds here.

Are There Any Loans Available Now? 

Your Bank

SBA Loans were available at both national banks and credit unions. Credit Unions have been known to be faster at processing requests than larger banks. Either way, banks are still offering traditional loans to businesses. Although interest rates are lower, the rates and fees you will be charged can vary. Contact your bank directly to find out if you qualify.

Line of Credit

A line of credit is another funding option for your small business or yourself. You will typically need to have a solid credit score to be considered. Once you qualify, you’ll have access to funding up until a set limit and only have to pay interest on the amount you borrow.

If you already have a credit line, you can request for a limit increase. Remember if you are looking to open a new line of credit, there are always great offers to new customers. Look for credit cards with no annual fee and 0% interest rate options.


If you could use a little extra cash at this time, look into Instacash by MoneyLion. It’s a zero-interest cash advance payment system that doesn’t require a credit check. There’s no monthly fee, and you could get cash today.

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Credit Builder Loan

If you don’t have the required credit score to borrow from a bank or take out a line of credit, a Credit Builder Loan can help you get the funds you need. A credit builder loan allows you to borrow at a low APR without a credit requirement.

By making consistent payments, you’ll be able to help raise your credit score. Read up on how to qualify for up to $1,000 with a Credit Builder Loan from MoneyLion.

Relief is Available

If you’re one of the millions of Americans whose business is suffering, or who has been laid off as a result of the pandemic – know that relief options are available. The government and the private sector are offering a variety of different options for people in your situation. 

You might also want to consider filing for unemployment during this time if you are an independent contractor or self-employed. Although times are tough, remember that every day we are moving closer to the day things return to normal.