Kylene Torres
A look at various business funding options.
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PPP loans were issued to help keep small businesses afloat during the coronavirus pandemic. As a form of unsecured finance, PPP loans were granted to qualifying businesses so they could continue paying employees and covering critical costs. Strict eligibility requirements, and funds had to be used for approved expenses only.
The Paycheck Protection Program is now in its second round of funding for eligible businesses. Yet many owners have already been declined a PPP loan. If you applied and were turned down, you may wonder why—and you are probably exploring alternative funding. Good news: solid options exist. Below we outline why a PPP application might be rejected and introduce other financing paths you can tap today.
How to Know if Your PPP Application Was Denied
Lenders, not the SBA, issue denial notices. Some include a reason; others do not. Typical causes include application errors, ineligible business status, or a prior default on an SBA loan. If you received a rejection without details, contact the lender directly for clarification.
While you wait for answers, consider these SBA-backed resources:
- SBA Express Bridge Loan – Existing customers of an SBA Express Lender can access up to $25,000 quickly to bridge temporary revenue loss before applying for a SBA Economic Injury Disaster Loan.
- SBA Debt Relief– Businesses with current SBA 7(a), 504, or Microloan financing (or loans issued before September 27, 2020) can receive six months of principal, interest, and fee payments covered by the SBA.
- Employee retention tax credit – Qualify for a refundable payroll tax credit of up to 50 percent of wages paid to each employee through December 31, 2020; sole proprietors can be eligible.
- Pandemic emergency unemployment assistance – Sole proprietors, independent contractors, and self-employed individuals may claim up to 39 weeks of unemployment benefits.
Additional Business Funding Options
Whether your PPP loan was denied or you simply need unsecured financing, consider these popular alternatives for rapid access to capital:
-Business line of credit – Draw funds as needed up to a preset limit, ideal for payroll expansion or operating expenses. Pay interest only on the amount you use.
-Online term loans – Borrow between $5,000 and $500,000 with turnaround times as fast as one day. Rates range from 7 to 99 percent APR, and repayment schedules are short, often daily or weekly.
-Invoice factoring – Convert outstanding invoices into immediate cash. Approval hinges on accounts receivable quality rather than your credit score.
-Merchant cash advance – Receive a lump sum quickly when traditional loans are out of reach due to limited credit history or lower scores. Repay via a fixed percentage of future card sales.
-Crowdfunding – Raise capital from supporters who receive products, services, or equity in return—no repayment required, but strong storytelling is essential.
-Equipment Financing – Secure funds specifically for purchasing equipment, using the equipment itself as collateral rather than relying on payroll coverage like PPP loans.
Business Funding Made Easy
Fast, flexible access to capital can make or break growth. If PPP loans are no longer an option, the SBA still offers programs for companies facing COVID-19 challenges, and alternative unsecured finance tools—such as a merchant cash advance or online term loans—can meet immediate needs. Evaluate each choice against your goals, cash-flow profile, and repayment comfort level, then move forward with confidence.
