Beyond PPP Loans: What’s the Next Option for Small Business Capital?

Harold Lichtenstein | August 19, 2022 | PPP | 3 Minutes to read

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The Paycheck Protection Program (PPP) was an extremely popular financing option for many U.S. small businesses during the COVID-19 pandemic, as it offered favorable terms, including full or partial forgiveness if funds were used within program guidelines.

With the Paycheck Protection Program in the rearview mirror, many small businesses are now wondering where to look next for capital to help fund their operations. Depending on what you want to do with your business, the SBA may offer another attractive source of capital.

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SBA 7(a) loans 

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The Small Business Administration (SBA) is a federal agency that backed PPP loans and it has a variety of other loan options available for small businesses, including 7(a), 504, and SBA Express. While the SBA doesn’t provide the actual funds, it facilitates the programs, determines program guidelines, and guarantees a portion of each loan funded by its network of approved lenders.

Building upon our success helping more than 115,000 businesses receive PPP loans, NEWITY is continuing to support small businesses by offering access to SBA 7(a) loans. The specifics are as follows:

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7(a) loan terms for small business loans:

  • Loan Amount: Up to $250,000
  • Term: 10 years
  • Interest Rate: WSJ Prime + 2.75%
  • SBA Guaranty Fee: None on loans of $100,000 or less
  • Loan Size Determination: Based on average annual revenue of business and FICO score
  • Allowable Uses: Working Capital for expenses such as payroll, utilities, 1099 payments, marketing, membership programs, expos, and more
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7(a) eligibility requirements for small business loans up to $250,000:

  • In operation for at least 3 years as a for-profit business
  • US-based location and operations
  • Owner-supported, owner-funded
  • Eligible based on SBA’s requirements
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Click here to apply for a SBA 7(a) loan in 30 minutes or less

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Other options for small business capital 

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NEWITY believes SBA 7(a) loans are some of the most beneficial forms of capital for small businesses in the post-PPP landscape, but if this option doesn’t suit your business needs, there are other options available as well, including:

  • Business line of credit – One of the most flexible forms of financing. A line of credit is revolving, so you can use it as many times as you want for qualifying expenses, and you only pay interest on what you use (not the full amount).
  • Business credit card – Credit cards specifically designed for small businesses. This option can be helpful as you can use them on almost any expense, but be careful as interest rates can be high and you could risk impacting your credit score if you do not make timely payments.
  • Venture capital or angel investment – High willingness to invest in innovative concepts. It’s important to note, however, that investments from venture capitalists or angel investors often require giving up a portion of equity and control of your business.
  • Peer-to-peer (P2P) or crowdfunding – Collecting small amounts from many lenders. Both types involve attracting small amounts of funds across a variety of people/lenders, but crowdfunding is typically sourced from an especially large group, such as funds acquired through Kickstarter.
  • Self-funding – Putting your own money into the business. Most business owners likely already have some amount of their own funds invested in the business, but if cash is tight, you can consider increasing the flow.
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NEWITY is here to help you understand your business’ options