PPP Loan Alternatives
PPP loans are no longer available, but private funders offer great business financing alternatives.
Use our loan eligibility checker to check if your business is eligible for a commercial alternative to PPP loans.
It takes one minute to complete and if approved you can get up to $900,000 in as little as 24 hours.
What Was the Paycheck Protection Program (PPP)
The Paycheck Protection Program (PPP) was a federal loan program that provided small businesses with the capital they needed to keep their workers on the payroll during the COVID-19 pandemic. Businesses could use PPP loan proceeds to cover payroll, mortgage interest, rent/lease, or utility payments during a pandemic. The program was administered by the Small Business Administration (SBA) and Economic Security (CARES) Act, which was passed by Congress in March 2020.
The PPP Loan Program has ended. To find out if you qualify for a PPP loan alternative, use our loan eligibility checker.
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Why did the Paycheck Protection Program End
The SBA Paycheck Protection Program (PPP) loan application period ended May 31, 2021. According to the SBA, the program had exhausted its funds and is no longer able to provide loans to small businesses.
Most small businesses are still experiencing the effects of coming out of the pandemic and still need financial support.
If your business has already taken out a PPP loan you may be eligible for PPP loan forgiveness. This loan is only forgivable if you spent the loan on payroll costs and Eligible non payroll costs.
If you do not qualify for PPP loan forgiveness there are still alternatives to finance the growth of your business. PPP Borrowers that need further financing assistance still have options. Use our loan eligibility checker to see if your business qualifies for a loan from MCashAdvance.
Top PPP (Paycheck Protection Program) Loan Alternatives for Small Businesses
Because small businesses are no longer able to obtain PPP loans through the PPP loan program, a small business owner should consider some of the PPP Loan alternatives listed below provided by different lenders and government agencies.
Government Alternatives to the SBA PPP Loan
SBA 7(a) Loan
The Small Business Administration (SBA) 7(a) loan program was the government’s most popular loan program. It provided small businesses with loans of up to $5 million for working capital, equipment, or real estate. But SBA stopped accepting new applications for COVID EIDL loans on January 1, 2022.
SBA Microloans
SBA Microloans are small loans, typically under $50,000, that the government put in place to help small businesses get new funding easily. Microloans can take between 30 and 90 days to receive. When looking for a microloan, patience is key, as both an intermediary lender and the SBA must approve your application
Commercial Alternatives to the SBA PPP Loans
Business Term Loan
A business term loan is a loan from a bank for a specific amount that has to be paid back over a set period of time. The loan is usually for a large amount and the repayment period can be up to 10 years.
Business Line of Credit
A business line of credit is a revolving line of credit that can be used for short-term financing needs such as inventory, seasonal expenses, or unexpected costs. This is a good solution if your business suffers from irregular cash flow and only needs temporary cash injections and does not have access to loan funds.
Invoice Factoring
Business invoice factoring is a type of financing where a business sells its unpaid invoices to a third party at a discount to receive immediate funding. This can be helpful for businesses that have difficulty collecting their invoices or need quick access to capital.
Merchant Cash Advance
This type of funding allows a business to sell a portion of its future credit card sales in exchange for upfront capital. If your business processes credit cards and are looking for upfront capital, check out our merchant cash advance financing options.
PPP Loans Vs Commercial Business Loans
Despite bold steps the government took to help finance businesses during the pandemic, the commercial financing sector is still the backbone of the economy.
There is still a significant amount of capital being lent to small businesses in the US by the commercial finance sector. A few government programs still offer financial assistance to small businesses as well.
In the table below, we compare the government-based paycheck protection program (PPP) versus loans available from the commercial financial sector.
| LOAN FEATURE | PRIVATE BUSINESS LOAN | PPP- LOAN (SBA) |
|---|---|---|
| DOCUMENTATION | Commercial lenders offer much broader flexibility with their funds. You can use the capital for almost anything in your business. An example would include invoice factoring, purchasing equipment, acquiring a business, marketing, acquiring customers, and expanding a business. | SBA Paycheck Protection Program (PPP) was designed primarily to maintain employment during the Covid19 crisis. In addition to the eligible payroll costs, the funds were used for: • economic injury disaster loans • mortgage interest • applicable overhead • property damage costs • supplier costs • Mortgage interest payments • Refinancing an SBA EIDL |
| REQUIREMENTS | Private lenders require less documents to approve and fund your business. In fact, some direct funders, like MCashAdvance, offer an online application form. In most cases a private lender would require only the following: • 3-6 months of bank statements • Copy of the owner IDs • Copy of the owner IDs Voided check | Private lenders require fewer documents to approve and fund your business. In fact, some direct funders offer online applications, like MCashAdvance. Private lenders usually require only the following information: • Payroll costs • Healthcare costs • Interest on any other debt obligations • Covered supplier costs • Covered worker protection expenditures • Copies of canceled checks • Bank statements with ACH information • Utility bills • Mortgage statements • Lease agreements • List of all employees on your payroll |
| LOAN AMOUNT | Commercial loans typically range from $10K to $2M. However, some funders approve loans up to $5 million without collateral | The maximum amount of your PPP loan will be 2.5 times your average monthly payroll costs, up to $10 million. You can only receive one PPP loan |
| LOAN PERIODS | The funding period is agreed upon between the business and the funder. Typical loan periods range from 3 months to 3 years (short-term business loans). | According to the SBA website, loans issued before June 5, 2020, have a two-year maturity. Five-year loans issued after June 5, 2020, have a maturity date of June 5, 2022. |
| SPEED OF FUNDING | Within 2-3 business days, on average. | From start to finish, it may take up to 3 months from application to money in the bank. |
| COST OF FUNDING | As part of a business deal, the lender and borrower agree on the terms of funding. In unsecured business loans, interest rates ranged between 4% and 35%, depending on the deal structure. | PPP loans have an interest rate of 1%. |
| COLLATERAL REQUIRED | Governments and lenders will not charge small businesses additional fees beyond the agreed interest rate. | A private business loan is unsecured. No collateral or personal guarantee is required. Lenders will not charge additional fees beyond the agreed interest rate. |
PPP Loan-Alternative Companies
Many companies provides alternative financing option to the SBA PPP loans. The companies below provides new financing options:
MCashAdvance
MCashAdvance specializes in providing Merchant Cash Advances (MCAs), an alternative to Paycheck Protection Program (PPP) Loans and other financing options backed by sba.gov. Our MCAs aim to offer a faster and more accessible funding solution, ensuring your business receives the necessary financial support without unnecessary delays or numerous hoops to jump through.
Biz2Credit
Biz2Credit has been around since 2007 and is backed by Nexus Venture Partners. They offer PPP loans, but they are prioritizing applicants who apply through their site so new customers should expect a processing time of 12-14 business days before getting approval from this company!
Lendio
Lendio is an online lending marketplace that connects small businesses in need of cash with a network lender. Borrowers can apply for loans through the site and will be considered regardless of credit rating or past payment history, as long they have a legitimate business.
Nav
Nav is a broker website that connects borrowers with lenders. While the program was in effect Nav participated in the PPP loan scheme.
BlueVine
Bluevine is an online lender that specializes in offering loans to help small businesses grow. According to its website, it accepted PPP applications that were looking for a first draw loan or a second draw loan. The company also helped with Economic Injury Disaster Loans application loans.
OnDeck
During the pandemic, OnDeck also helped small businesses obtain PPP funding. According to their website, they did not participate in any more PPP loan application support in 2021. Currently, they only offer traditional funding.
Small Business Can’t Get a PPP Loan but It Can Get Financed
The PPP Business owners can no longer submit PPP Loan Forgiveness Application but many new financing options and private funding alternatives exist. Is doesn’t matter if you are a self employed, a sole trader or a small business owners, new financing options are available for you to grow your business.
Frequently Asked PPP Loan Questions
SBA Microloans, SBA 7(a) Loans, Business Term Loans, Business Lines of Credit, Invoice Factoring are alternatives to PPP loans.
PPP loans (principal plus interest) can be forgiven entirely, meaning there is no need to repay them. But you will be required to repay the loan if you don’t apply for forgiveness.
If the funds were used for paying payroll costs, mortgage interest payments, rent, or utilities within an 8- or 24-week period after disbursement, PPP borrowers are be eligible for loan forgiveness.
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