Didn’t Get a PPP Loan? Here Are Your Other Financing Options During COVID-19


Last Updated August 26, 2021

The Paycheck Protection Program (PPP) offers much-needed relief for small business owners struggling to stay on top of costs during the pandemic. Unfortunately, not every entrepreneur managed to secure one of these loans.

Hasty implementation and high demand for funds led to system crashes, processing delays, and other complications. If you fail to benefit, there are other PPP alternatives you can explore to keep your business afloat during these uncertain times.

Evaluate Your PPP Application Status or Reapply

Before you begin searching for other funding options, it’s worth trying again with PPP. Contact your lender to determine the status of your application.

If you were denied due to ineligibility and believe that the Small Business Administration (SBA) made a mistake, you could file an appeal within 45 days.

If an application error is a culprit behind denial, review the criteria that lenders assess when determining whether or not to grant a loan.

Although each individual is only entitled to a single loan, nothing stops you from applying to multiple lenders to boost your chances. You can consult with SBA-approved lenders to find the best fit for your organization.

Other SBA Loan Programs

Bear in mind that PPP is only one of the SBA’s loan programs for small businesses. There are four other possibilities to finance your establishment:

Economic Injury Disaster Loan

An Economic Injury Disaster Loan (EIDL) aims to cover regular operating costs due to pandemic-related loss of income. The capital is intended to go towards standard business expenses such as debt, utilities, rent, and more.

The loan amount is based on what the SBA determines your economic injury to be. Businesses are entitled to a maximum of $2 million by law.

Microloan Program

The SBA offers microloans in amounts up to $50,000 for small enterprises, although the average microloan is $13,000. Although the money can be used for working capital, fixtures, and equipment, you cannot repay debts or purchase real estate.

These microloans are only available through SBA-approved intermediaries. Here is a list of lenders that qualify.

Express Bridge Loan

If you already have a business relationship with an SBA Express Lender, you could be eligible for an Express Bridge Loan of up to $25,000. As the name suggests, this loan can pay off expenses rapidly while you wait for an EIDL application to process.

In turn, the Express Bridge Loan is covered—at least in part, but potentially in full—by EIDL proceeds.

Debt Relief

The Debt Relief initiative allows business owners a reprieve from SBA loan payments for six months. It covers both interest and principal payments, as well as any other associated fees.

SBA payments for loans that are on deferment begin as of the end of the deferment period. For non-deferment loans, Debt Relief kicks in immediately after acceptance.

Personal Loan

Bank loans aren’t generally considered accessible financing for many small businesses pre-pandemic, but things have changed.

Certain banks are offering coronavirus hardship loans, which have lower interest rates than usual. Shopping around regional and local banks to review what terms are available won’t hurt.

State Programs

Research state-funded programs to support local businesses: almost every state has at least one program to keep small companies afloat.

For instance, the New York Forward Loan Fund (NYFLF) provides financing to small businesses impacted by COVID-related revenue losses.

Private Relief Funds

Private investors are working alongside the government and banks to support small businesses too. Such entities support organizations such as Opportunity Fund, and big-name corporations like Amazon and Facebook launched community funding initiatives.

Invoice Factoring

Businesses with extended payment cycles can sustain cash flow while waiting for payments via invoice factoring. An invoice factoring company purchases your invoices—money owed by clients—and advances you between 80 and 90 percent of the total.

Administrative fees and interest rates get deducted from the sum.

Remember, invoice factoring isn’t a loan. Instead, it’s income you are entitled that’s paid out earlier to cover long gaps between payments.

Stay Afloat During COVID-19

Running a small business in a pandemic is no easy feat, but luckily there are plenty of other funding resources at your disposal aside from a PPP loan.

Remember that while the PPP program exists, it’s worth reapplying to a different SBA-approved lender if you’re eligible. If your PPP application status is inconclusive, follow up with it before seeking another financing solution.