In this 5-minute read:
- What to do if your PPP loan is not enough
- What to do if your PPP loan is too much
- How can you make sure to get the right loan amount the first time?
If you are surprised by the amount you receive from the PPP loan, you have options to help remedy the situation. The system isn’t perfect, so even if you applied for the amount you needed, you may not get that in its entirety, or you may have miscalculated and received too much or too little.
Not to worry. This guide will walk you through your options.
Get your PPP loan or second draw PPP loan through Womply! Womply has helped over 200,000 businesses get their PPP funding. It’s free to apply for a PPP loan, and Womply can help connect you with an SBA lender that’s right for you! Start your PPP application.
What to do if your PPP loan funding is too low
In some instances, you may not be able to apply for a loan large enough to cover all of your expenses for an 8-week period. Whether that’s because your operating expenses far exceed that of your payroll costs or whatever your situation may be.
When you receive your loan offer, if it is too small to cover the necessary costs to keep your business running for the next couple of months, you should speak with your lender directly about a possible amendment. They may need to escalate this with the SBA.
Since your lender is ultimately the entity that decides the loan amount that you should be approved for, you may find difficulty getting them to change their decision. But if you feel a mistake was made, it may be worth it to work with them to figure out what can be done to fix it.
There are certain instances where the SBA has stated that a PPP loan increase can be approved:
- If a partnership received a PPP loan that did not include any compensation for its partners, can the loan amount be increased to include partner compensation?
If a partnership received only an amount that covered their employee payroll and didn’t include compensation for the partners, then their lender can electronically submit a request to increase the loan amount through the SBA’s E-Tran Servicing site, even if the loan has been fully dispersed.
- If a seasonal employer received a PPP loan before December 27, 2020, can the loan amount be increased based on a revised calculation of the maximum loan amount?
Yes, if a seasonal employer received their PPP loan prior to December 27, 2020 and they were eligible for a higher maximum loan amount, their lender could submit a request to increase the amount through the SBA’s E-Tran Servicing site, even if the loan had been fully dispersed.
- Which other PPP borrowers can reapply or request an increase in their PPP loan amount?
The SBA has outlined certain types of borrowers that may reapply for the first draw PPP loan or request an increase in their loan amount:
- If a borrower returned all of their PPP loan, they can reapply for a new PPP loan amount for which they are eligible
- If a borrower returns part of their PPP loan, they can reapply for an amount that is equal to the difference between the amount they kept and the amount that was previously approved
- If a borrower didn’t accept the full loan amount they were previously offered, they can request an increase up to the previously approved amount
Any requests to increase your PPP loan amount must be submitted by your lender through E-Tran by March 31, 2021 and is subject to the availability of funds.
If you can’t get more for your PPP loan, all is not lost. Take what you can get there and try some of these additional funding options:
- EIDL Grant Program
- Small business loans
- Business lines of credit
- State grant programs
What to do if your PPP loan amount is too much
In some instances, you may receive your loan approval and realize it’s much more than you’ll need. Maybe you’re concerned that you won’t be able to spend 60% of that entirely on payroll costs for the next several weeks and don’t want to be denied full loan forgiveness.
Once your PPP loan is approved, you will have the opportunity to accept or deny that amount. You can also choose to accept a lower amount on your loan. At a later point (before March 31, 2021) if you decide you will need that extra amount, you can have your lender request an increase up to the amount you were previously approved. Again, this is subject to the availability of funds.
You may also decide to accept the full loan, use what you need for payroll costs and other expenses and pay back the rest. You may only qualify for partial forgiveness at that point, but that partial forgiveness should cover what you spent on eligible costs.
How can you make sure to get the right loan amount the first time?
We recommend working with someone that is familiar with the PPP loan and how to calculate the right loan amount. Womply is a verified loan agent working with SBA approved lenders and can help you through this process.
You can also review these guides to help calculate your maximum PPP loan amount:
- How to calculate your maximum PPP loan amount: self-employed with no employees
- How to calculate your maximum PPP loan amount for S or C corporations
- How should partnerships calculate their maximum PPP loan amount?
- How do I calculate my maximum PPP loan amount if I have employees?
- See our PPP FAQs for more details
Apply for your PPP loan with Womply!
As you know, it’s free to apply for a PPP loan, and we know you have lots of choices. So why should you let Womply connect you with an approved SBA lender? Because we know what we’re doing and people love the help we provide. We’ve helped over 200,000 businesses, contractors, sole proprietors, and self-employed individuals get approved. Don’t wait! The deadline is March 31, 2021.
Learn more, plus get free reputation monitoring and customer insights when you sign up for Womply Free!