Does Chime Accept PPP Loans?
Chime is a well-known American financial technology company that offers mobile banking services without any charges. According to a recent announcement by Chime, they are not accepting any business transactions, including deposits and loans for business purposes. Moreover, Chime will not accept the PPP loan, and if you apply for a PPP or SBA loan, the loan application will be rejected and returned to the IRS. Anyhow, Chime accepts deposits of PPP loans. Suppose you have a Paycheck Protection Program (PPP) loan approved by an equivalent ChimeBank lender. In that case, you can deposit the loan amount in your Chime Spending Account.
What is a PPP Loan?
The Paycheck Protection Program or PPP is a credit program supported by the Small Business Administration (SBA). This loan program has one purpose of enabling small business owners to keep their employees working during the coronavirus pandemic situation. Mainly there are two types of PPP loans available.
- First Draw PPP Loan
- Second Draw PPP Loan
1. First Draw PPP Loan
If you have never received a payroll loan, you may be eligible for a First Draw PPP loan. With the SBA, you can use this money for various purposes. It includes the costs for Fund Payrolls, mortgage interest, rent payments, utility expenses, employee protection costs related to COVID19, compensation for uninsured property damage from looting or vandalism in 2020 and the payment of a specific supplier and operating costs.
The amount you can receive with a First Draw PPP loan depends on your salary and the number of employees, but the maximum loan is up to $10 million. According to the SBA, the average PPP loan is $ 107,000, and 86.5% of all loans offered under the program are less than $150,000.
2. Second Draw PPP Loan
The Second Draw PPP Loan is intended for business owners who have previously received a PPP loan. The second draw loan can be used for the same purpose as the first draw loan and is subject to the same 1% interest rate.
The maximum amount you can borrow on your second draw PPP loan is 2.5 times your business’s average monthly salary cost in 2019 or 2020, with a limit of $ 2 million. Accommodation and hospitality companies can use 3.5 times the monthly average salary for 2019 or 2020 to determine a maximum loan amount of up to $ 2 million.
Who Can Be Eligible for PPP Loans?
The SBA has some guidelines on who can apply for a PPP loan. Let’s see below who is eligible for the First Draw PPP loan and who are not. The list includes:
- Four thousand four hundred forty-four sole proprietors, independent contractors, and self-employed.
- SMEs or small business concerns that meet the size standard set by SBA (either industry standards or alternative size standards)
- Businesses, non-profit organizations,) veteran organizations, or tribal businesses that contains almost 500 employees, or above 500. It is the SBA industry standard for offering PPP loans.
- Businesses with NAICS code starting at 72 (accommodation and dining), multiple physical locations, and each location hiring less than 500 employees
While in case of “Second Draw PPP loan”, you can be eligible if:
You have previously received a First Draw PPP loan and have used it only for authorized purposes or have used it in full, or your company has less than 300 employees. Moreover, if there is any reveal of decrease in total revenue of at least 25% between the comparable quarters of 2019 and 2020.
The COVID 19 pandemic must have influenced your company. And you need to be operational by February 15, 2020.
Which Banks are Currently Accepting PPP Loans?
Here is the list of a few banks that are accepting PPP loans.
● Center State Bank
CenterState Bank accepts first and second PPP loan applications. The bank will email former PPP customers information on applying for a second loan. New customers will need to fill out an interest form, and the bank will contact you.
● CenterStone SBA Loan
This non-bank lender will accept the first and second lottery applications for PPP loans. See more details on their website.
● Chase Bank
Chase accepts first and second PPP loan applications through its website. To apply, you must have a current Chase Business Checking Account or be willing to open a Chase Business Checking Account.
● American Credit Center
The American Lending Center, a non-bank lender, accepts PPP loan applications on its website.
● Ameris Bank
Ameris Bank accepts applications from borrowers who receive their first PPP loan through the bank. You can also apply for new customers based in Alabama, Florida, Georgia, North Carolina, and South Carolina.
● Bank of choice
Existing Bank of Hope customers can apply for a first or second loan through a lender.
● Bank of the West
As of January 1, 2021, the Bank of the West is accepting first and second PPP loan applications from existing customers who have active business accounts.
Alabama-based banks are currently accepting applications for first and second PPP loans. It would help if you had an existing BBVA checking account to qualify for the loan.
How to apply for a PPP Loan?
If you think you are eligible for a PPP loan, the first step is to find a lender. You can use SBA’s Lender Locator tool to find an approved lender near you. Alternatively, you can use SBA’s Lender Match to contact your PPP lender. This matching may take several business days. Once you have chosen a lender, the next step is to apply for a PPP loan. It implies that filling out a loan application and providing the following supporting documents requested by the lender:
- A government-issued ID for all owners with a 20% or more stake in a business.
- Evidence of doing business before February 15, 2020
- A copy of the applicable tax form, including the full business tax return.
- W2, IRS Form 944, or payroll expense documents that may include a third party payroll processing report.
- Account statement
You must also provide the bank account number and path number of the account you wish to deposit funds into. If you are applying for a second draw PPP loan, you must complete another application. After submitting the application and supporting documentation, the lender will review it to determine if you are eligible and the amount of the loan you may be eligible for a loan. You will have the opportunity to review the loan terms before signing the final document confirming that you will continue with the loan. SBA regulations require lenders to pay out PPP loans within ten calendar days after the application is approved.