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Lenders will once again begin processing applications for the Paycheck Protection Program on Monday, but business owners with applications on file may want to think twice before updating their documents.
Lawmakers reached a deal to allocate another $310 billion to the program, which already burned through the initial $350 billion worth of funds. So far, the administration says the program has loaned to more than 1.66 million businesses.
Many businesses, however, are still in their banks’ queue to receive loans.
And some people who did not have their application processed in the first round may have since realized they are eligible for more money, L.J. Suzuki, the founder of CFOShares.org, told FOX Business. Many people were rushing to get their applications in and may have made a small oversight, like basing their payroll calculations on the estimate that would reap less money.
“A lot of people are thinking about updating their applications to increase the amount they are asking for,” Suzuki said.
However, Suzuki is advising people not to do that because “you might you lose your place in line.”
The process is likely different with every lender, but Suzuki said it’s not worth risking.
On the flip side, if you have made a mistake and requested too much money – this is a case where you should update your application.
The administration has indicated that people with applications on file should receive attention first.
“We encourage all approved lenders to process loan applications previously submitted by eligible borrowers and disburse funds expeditiously,” Treasury Secretary Steven Mnuchin said in a statement on Friday.
And your standing in the queue could be particularly important considering Suzuki does not believe all eligible business owners will end up receiving a loan.
“If I had to judge based off the people I know, in the first round about 20 percent of the applicants received their PPP,” Suzuki said.
Overall, he expects as many as half of all business owners will not receive funding.
But another thing business owners shouldn’t do is apply at multiple locations. This could cause your applications to get stalled out when they hit the Treasury Department, Suzuki noted, and there’s a good chance you won’t get any funding.
PPP is designed to incentivize companies with fewer than 500 employees to keep staff despite difficult economic conditions that have resulted from the coronavirus pandemic. Applicants can receive up to $10 million, which can be forgiven in certain cases. At least 75 percent of the money must be put toward payroll costs – the other portion can be used for mortgage interest, utilities and rent.
There are other available options for business owners, including the Small Business Administration’s economic injury disaster loan program and some available tax credits.
PPP will reopen on Monday at 10 a.m. ET. So far, the SBA says 30 million American jobs have been protected.