Long-Term Financing Tips for PPP Borrowers

Part of the government’s COVID-19 stimulus package is the Paycheck Protection Program (PPP) which is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. For companies with declining revenue, this money offsets the need for layoffs to cover losses, and for companies not suffering a drop in revenue, it’s a windfall.

The “rules” for this Program say that if loan recipients keep their employees on the payroll for eight weeks and that the money is used for payroll, rent, mortgage interest or utilities, the SBA will forgive these loans. While many loan recipients are counting on these loans turning into a grant; that may not end up being the case.

At Celtic Capital, we’ve seen a significant number of companies successfully securing these loans. In fact, a number of our prospective clients have received PPP money and as a result, have put their refinancing plans with us on hold. While we understand their thinking, we offer the following three points for business owners to consider as they go through their PPP dollars:

  1. PPP money is for the short term. It’s important to get a long-term financing relationship in place now, especially if you have a lender who’s interested now. While the timeline on due diligence is short, you can get the approval process going, see what you qualify for, and have a lender ready when you’re ready.
  2. Many businesses were a hair’s breadth away from being asked out of their banks before the pandemic hit. As banks are paying attention to much bigger issues now, they’re holding off on exiting individual clients. But that’s going to change later this year and a PPP loan won’t change the bank’s position on wanting to exit a client.
  3. It’s always better to be looking for financing before you need it. How long until your PPP money runs out? Three weeks? Three months? Ideally, if you don’t have a lender lined up, you should start looking 90 days out and if you do have a lender in mind, rule of thumb is 45-60 days.


The Paycheck Protection Program won’t keep your business running indefinitely. Business owners who continue to keep a long-term financing perspective and act on that now will be much better positioned when this crisis is over.

About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.

As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.

If you know of, or are, a business in need of non-traditional financing, contact Mark Hafner at 800.742.0733 or mhafner@celticcapital.com, or visit us at www.celticcapital.com.