8 Alternatives to Go for if You Can’t Get a PPP Loan

PPP loans have been the saving grace for most small business owners during these challenging times. The pandemic caused one of the most rapid standstills in economic activity globally, and these business owners were the worst hit.

The PPP has helped the government uplift as many small businesses as it can by increasing their chances of eligibility. For instance, business owners now don’t have to guarantee their loan personally, nor do they need to put up any loan security.

However, with millions of small businesses spread across the country, it’s understandable that some of them might miss out on a PPP loan despite the government’s efforts. The good news is that there’s more than one way to secure funding in the pandemic era.

We have compiled a list of alternatives to PPP loans to help American citizens keep their businesses afloat before the economic climate perks up.

But first, let’s take a look at why the PPP loan feels so elusive for some businesses.

Why are Some Businesses Still Waiting on Their PPP Loan?

You might be looking for other options because you haven’t heard back from your lender yet you submitted all the required documents.

It’s good to note that the lenders have dealt with millions of applications since the program started, and they are still processing a huge number of submissions. Even the SBA agency slowed down the number of applications they are approving to allow other lenders like credit unions to forward their applications.

Try not to panic if you haven’t gotten a response, and get in touch with your lender. They’ll confirm whether they’re in a position to offer you a PPP loan this time. That way, you’ll be sure if you need to wait or look for another similar program.

Why are Some Eligible Businesses Denied the PPP Loan?

Knowing why your lender denied your loan application is key to securing more financial resources in the future. Lenders usually put all applications under thorough review. They’ll confirm that the loan amount in the request is 2.5 times the business’s average payroll per month.

They also look at whether the documents a business submits prove the payroll costs on the application. If there are errors in the application or information that doesn’t add up, they either request a business owner to re-apply or reject the submission.

Re-applying might throw the application far back in the consideration list, and the lender may fail to get to the submission a second time.

What are PPP Loan Alternatives for Your Small Business?

There are other courses of action that you can take if you didn’t get a PPP loan or feel like the loan doesn’t work well with your business setup.

1. Use Free Opportunities Provided by Large Businesses

We saw a lot of companies step up in support of small businesses when the pandemic hit. Amazon and Google for instance had stepped up to help relieve some of the pressure on the businesses they work with.

One such remaining organization is the Lawyers for Good Government Foundation. They plan on setting up legal clinics that bring together many law firms and non-profits.

The clinics will offer guidance on programs that offer loans, grants, and other types of aid and how small business owners can get those opportunities. They will also have pro bono consultations to assist business owners with legal issues caused by the effects of covid-19.

You’ll also want to keep an eye out for large businesses you interact with. They might just decide to give some major support, or they already have some measures in place to help small businesses.

2. Apply for Employee Retention Credit (ERC)

The Taxpayer Certainty and Disaster Tax Relief Act of 2020 modified and extended the ERC till June 30 2021. It now allows eligible employers to claim a refundable tax credit amounting to 70% of the wages they were to pay to employees after the start of 2021 through June 30.

Employers are eligible if the government suspended their business operations, either fully or partially, to combat Covid-19. They can also apply if their gross receipts for the calendar quarter in 2021 are 80% less than the same quarter’s gross receipts in 2019. Read further on it here since it also accommodates employers that started in 2020.

3. Get Invoice Factoring

Your accounts receivable ledgers might be screaming sales, but the slow collection process immensely slows down your business. Your money will feel like it’s in a holding cell while you’re out there with expenses to cover to sustain the business.

Invoice factoring can allow a third party to purchase your uncollected deals at a discount. It’s perfect for businesses that need quick cash that they don’t want to repay.

Moby Capital has experts who can analyze your business and tell whether your AR is eligible for offers. You can get offers of up to 90% of your outstanding AR, which will allow you to get instant revenue to run your business.

4. Prepare for Future Aid Programs

Most businesses who didn’t get a PPP loan really struggled with having their financial documents ready at the necessary time. You should ensure that you have all documents, including your tax returns, in order so you’ll be ready anytime a relief program pops up.

Monitor your credit score to know where you stand since most lenders will check up on this to determine whether you’re eligible.

5. Get a Business Line of Credit

A business line of credit provides way more flexibility than traditional business loans. It gives small business owners cash up to a specific limit. The agreement is that owners use the funds provided when they need them, and they’ll only have to pay interest on the used amount.

While the rates differ, you can work with funding specialists like ours at MobyCap to get the best rates on your loan. Our team also goes further to provide a virtual line of credit that allows clients to access more funds before the initial debt is repaid.

6. Opt for an Economic Injury Disaster Loan (EIDL)

As good as it is, the PPP loan is not the only relief program out there. The EIDL is unique in that it doesn’t require businesses to prove that they can’t access funding from another source.

These are some of the eligible groups:

  • Small businesses and cooperatives having 500 employees and below
  • Private non-profit organizations
  • Independent contractors
  • Sole proprietorships
  • ESOPs fewer than 500 employees

One can apply for an EIDL from the SBA’s website, which takes a little over two hours, or they can send the application via mail to their headquarters. The small businesses who want to apply need to qualify in terms of the owner’s personal credit score.

Religious, gambling, agricultural, and charitable organizations, however, don’t qualify for the loan.

7. Apply for SBA Microloans and Express Loans

The SBA has a microloan program that is perfect for very small businesses like freelancers. The loans can go up to $50,000, and they can use the money similar to an EIDL loan.

However, they might be required to get some training done to help upgrade their business with the money they receive.

SBA Express loans, on the other hand, usually give businesses credit decisions in 2-3 days. The loans are usually overwritten and issued by the SBA’s approved lenders, and a business can get an offer of up to $350,000.

Small businesses can also use the money they get from the loan for a wider variety of things like refinancing debt or acquiring real estate.

There are other types of SBA loans like 7(a) loans and 504 loans. All these SBA loans are attractive in that their rates are much like those of non-guaranteed loans. That coupled with flexible eligibility requirements and lower down payments make them a go-to.

For instance, if a business meets the minimum requirements, our team at MobyCap can offer these loans. The requirements are that a business should have been in operation for at least two years, and acquired a minimum annual revenue of $1 million.

The cherry on top is it should be a for-profit with a FICO score of 680+ and have no outstanding tax liens. Lenders, however, can make exceptions for enterprises faced with special circumstances.

8. Look for Term Loans

A term loan is an alternative that offers small business owners clarity on exactly how much they owe and how the repayment schedule is going to work.

Everything is discussed when the agreement is made allowing businesses to properly plan how they’ll spend their money with regard to their future. These loans usually have lower and fixed interest rates since business owners mostly opt to pay them over an extended period of time.

Due to their nature, term loans offer flexibility that is not usually seen in other types of funding, making them a classic favorite for small businesses. They also have a predictable payment schedule which is easy to plan around.


You don’t have to worry that your business will sink because of lack of funding. If you don’t know how to navigate the various alternatives, our team at MobyCap can handle the process for you as we have for thousands of other happy business owners.

Our years of experience allow us to be the best at offering flexible funding options like SBA loans, business lines of credit, invoice factoring, and term loans, just to name a few.

We can provide businesses with up to $5M, which is unmatched by any other company in our industry.

Click Apply Now to start your secure online application. You can also Contact Us electronically or call 737-577-1180 if you wish to talk to a funding expert about your situation. We look forward to hearing from you!

Get Funds CALL NOW