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What Small Business Loans Are Available After the Expiration of PPP?

  • The Paycheck Protection Program has expired, and banks have been more reluctant to approve loans to small businesses
  • Businesses have cut back on investments and expenses, but also worry about survival if economic conditions do not improve in the near future
  • Certain loan programs, including options through the Small Business Administration and Federal Reserve, provide continued avenues of support

As countless small businesses were forced to close or adjust their business models during the COVID-19 pandemic, the Paycheck Protection Program provided a crucial lifeline. Funding for the PPP, part of the bipartisan CARES Act passed in Congress, provided billions of dollars in loans that can be repaid at a low interest rate or forgiven completely if a business meets certain parameters.

The deadline to apply for PPP funding expired on Aug. 8. Supplemental COVID-19 relief bills proposed by House Democrats and Senate Republicans both advocate for a revival of the PPP, but disagreements between the parties on numerous aspects of the second round of relief resulted in Congress recessing without reaching a consensus.

About one in four small business owners signaled in a recent National Federation of Independent Business survey that they will need to close if economic conditions do not improve in the next six months. A similar share suggested that they’ll need to see better conditions within the next seven to 12 months in order to survive. Compounding the challenges faced by small businesses, banks have been more reluctant to take on the risk of lending to businesses and businesses themselves have reigned in investments during the current economic climate.

Businesses looking to get some additional relief have other loan programs to choose from. These include the Small Business Administration’s Economic Disaster Injury Loans, the Federal Reserve’s Main Street Lending Program, and the U.S. Treasury Department’s Community Development Financial Institutions Fund.

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