Not many small businesses benefited from the first round of the Paycheck Protection Program (PPP). According to a report on PPP activity released on May 1, loans worth more than $2 million accounted for about 1.5% of the total loans, eating up nearly 25% of the allocated $310 billion. In the end, the average loan size was $206,000, locking out most small businesses.
If you’re one of the many SMBs that were left out, you’ll be glad to know that the second round of the program is here. An additional $310 billion has been set aside to help businesses – and this time, every effort is being made to reach vulnerable small businesses.
First off, the average loan size will be smaller, meaning that the fund can reach more SMBs. Better still, $60 billion of the new $310 billion has been specifically reserved for smaller, nonbank lenders that typically cater to companies with fewer resources.
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Top Nonbank Lenders to Consider
If you’ve not applied for the loans yet, it would be highly recommendable to consider these nonbank lenders as it significantly increases your chance of getting approved. The following are some of the best options to consider;
- PayPal Holdings: PayPal Holdings was one of the first nonbank institutions to be approved for the PPP program. The digital lender is working with WebBank to process the payments.
- Square Capital: Although Square Capital is best known for Point-of-Sale software, the company has also been approved to process loan applications under the PPP program. You, however, need a Square account to apply.
- BlueVine: BlueVine is accepting applications for PPP loans for any type of small business, regardless of your industry, and submitting qualified applications to the SBA.
- FountainHead: FountainHead is a nonbank lender approved to make SBA 7(a) loans. You can lodge your loan request online and follow up on the progress through their website.
- OnDeck: OnDeck says that it may prioritize existing customers when processing PPP loans. So, if you’re a customer, it would be a good idea to make your application through them.
- Lendistry: This Community Development Financial Institution (CDFI) is submitting PPP loan applications in at least 12 states, including its home state California.
- Funding Circle: Funding Circle is another very reputable online market place, and now one of the preferred PPP nonbank lenders.
- FAM: Finally, you can also apply for a paycheck protection program loan through the ever-reliable FAM.
Several other nonbank lenders have been approved to process PPP loans, but the seven above stand out for being tried and tested. These lenders also disburse PPP funds much faster, typically within ten days of approval.
AUTHOR BIO: Michael Hollis is a Detroit native who now lives in Los Angeles. He is an account executive who has helped hundreds of business owners with their merchant cash advance solutions. He’s experimented with various occupations: computer programming, dog-training, scientificating… But his favorite job is the one he’s now doing full time — providing business funding for hard working business owners across the country.