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Active Undisbursed: Understanding the Approval Process for PPP Loans (2023)

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Does active undisbursed mean approvedIs your business curious about the status of its PPP loan application but unsure what ‘Active Un-Disbursed’ means? Understanding when to expect funds, and how lenders decide if a loan is approved or denied are important steps in understanding the approval process for Paycheck Protection Program (PPP) loans.

This article will provide an overview of ‘Active Undisbursed’, explain the lender decision process, discuss credit inquiries and promissory notes, as well as common mistakes that can impact SBA approval.

Continue reading to gain insight into whether Active Undisbursed means your loan has been approved.

The Paycheck Protection Program (PPP) was designed to provide American small businesses with funds to pay employees and overhead during the COVID-19 crisis. Applicants for PPP loans apply through approved SBA lenders, who review applications and make loan approval decisions based on SBA criteria.

If your lender status says “Active Un-Disbursed,” it means your PPP loan has been approved by your lender, but funds have not yet been distributed to your account. This status indicates you have made it through the initial review and underwriting process with your lender.

But there are still a few steps remaining before you will receive the loan funds.

After a PPP loan is approved, the lender requests a loan number from the SBA. This activates the loan guarantee. The lender then works with the applicant to process any pending paperwork and confirm information.

Once final details are verified, the lender disburses funds, often 2-4 days after approval.

So Active Un-Disbursed means your PPP loan is in the queue awaiting final processing. As long as you provided accurate information and comply with requirements, funds should disburse shortly. If there are issues or delays, your lender will contact you for clarification or documentation.

With an approved loan number, you are in the home stretch. Continue monitoring your account and corresponding with your lender until the funds arrive in your business account.

Key Takeaways

  • Active undisbursed status means that the PPP loan application has been approved but is awaiting funds.
  • The PPP loan application process involves lender approval, SBA guarantee, and final disbursement.
  • Careful completion of SBA forms is crucial to avoid common mistakes that could negatively impact SBA approval.
  • Monitoring the status code for PPP funding progress helps in understanding the loan approval process and the final steps before funds are disbursed.

What Does Active Un-Disbursed Mean?

What Does Active Un-Disbursed Mean
You’re in luck – active un-disbursed means your PPP loan has been approved and now they’re just waiting to send you the funds. Keep an eye out for that deposit to hit your account soon! The lender has confirmed your eligibility and documentation, so your application has gone through approval.

Now comes waiting for the lender to actually disburse the loan amount. Active Undisbursed status on Form 1502 shows you’ve crossed the biggest hurdles – passing underwriting and getting the green light.

Understanding the Status of Your PPP Loan Application

Understanding the Status of Your PPP Loan Application
When your loan shows as active undisbursed, it means the lender has approved your application and is just waiting to send the funds.

  1. Your application is fully approved.
  2. The loan agreement is signed.
  3. The lender is ready to disburse.
  4. The SBA guarantee is in place.

Seeing active undisbursed is a positive sign that your PPP loan is moving forward. The lender has done their review and signed off. Now they’re just processing the payout. Stay in touch with your lender if you have any other questions. But rest assured, active undisbursed means your loan is approved and on the way.

The Approval Process for PPP Loans

The Approval Process for PPP Loans
Having trouble with your PPP loan approval? Don’t worry, an expert advisor can help explain the process and next steps if you’ve hit roadblocks. First, focus on understanding why you were denied by a lender or withdrew applications before signing a promissory note.

Lender Denials and Finding Another Lender

If denied a PPP loan by one lender, don’t give up; quickly compare offers from others online for the best terms and rates. While starting over after withdrawing an application can be frustrating, being denied for adverse reasons makes finding another lender challenging.

But new options exist to easily compare multiple offers, maximize your chances for approval, and get the funding you need without another hard credit check.

Signing Documents and Withdrawing Other Applications

Once you sign the promissory note for a loan, it is crucial that you withdraw any other loan applications you have submitted to avoid potential problems. Before signing any promissory note, make sure you have gathered all the required documents and fully understand the terms and conditions of the loan.

Signing a promissory note signifies your legal commitment to repay the loan according to the specified terms.

After signing the promissory note, you should immediately contact any other lenders you have applied to for loans and formally withdraw those applications. Withdrawing other loan applications will not negatively impact your credit score or history, so you don’t need to worry about that.

However, failing to withdraw other applications could result in multiple loans being approved and funds being disbursed from different lenders, leading to headaches down the road.

Call up the other lenders you’ve applied to and clearly state you want to withdraw your application and cancel any credit checks or approvals they’ve made. Request written confirmation of your application withdrawal for your records. It is important to do this quickly, before any funds are disbursed on the loans, to avoid ending up with multiple loan commitments.

Managing payments and communications for multiple loans is an unnecessary burden you’ll want to avoid.

Withdrawing duplicate loan applications in a timely manner once you’ve signed a promissory note with your lender of choice will help ensure a smooth, straightforward loan process without complications.

Just be sure to have all your documentation in order before signing anything and then promptly call other lenders to withdraw other applications.

Credit Inquiries and the PPP Loan Application

Credit Inquiries and the PPP Loan Application
Rest assured: Your credit stays untouched when applying for PPP relief. Unlike with personal loans or mortgages, the PPP process avoids hard credit checks. Your business qualifies based on eligibility, not creditworthiness. Lenders only review tax documents, payroll records, and financial statements.

Promissory notes and loan agreements precede funding, not approvals. Active undisbursed status means your loan is approved and awaiting disbursement.

Focus on proper documentation, accurate calculations, and prompt responses. With diligence, perseverance, and optimism, your road to PPP success remains wide open.

Status Meaning Next Steps
Active Undisbursed Approved, awaiting funding Provide requested docs, sign promissory note
Active Disbursed Loan funded and currently active Use funds only for eligible expenses
Fully Cancelled Loan cancelled, no longer active Reapply if still within covered period

The Significance of Receiving the PPP Promissory Note

The Significance of Receiving the PPP Promissory Note
Signing the PPP promissory note brings you one step closer to funding, but doesn’t guarantee approval. The promissory note outlines the terms and conditions of the loan, but there are still a few more steps before funds are disbursed.

  1. Lender underwriting and verification
  2. SBA approval
  3. Loan documentation
  4. ACH transfer of funds into your account

Receiving the note means your app’s complete. However, the lender must still review your docs, and the SBA gives final approval. Stay in close contact with your lender throughout the process to ensure no delays in getting your PPP loan funded.

Key Points:

  • Signing the promissory note’s an important milestone, but not a guarantee of approval or funding.
  • Lenders still need to complete underwriting and verification. The SBA does final review and approval.
  • Loan documentation and ACH transfer of funds are the final steps before money’s disbursed.
  • Maintain communication with your lender to avoid potential delays in the PPP loan approval and funding process.

Common Mistakes That Impact SBA Approval for PPP Loans

Common Mistakes That Impact SBA Approval for PPP Loans
You’d be foolish not to ensure your application’s free of mistakes before submission, lest your PPP loan remain mocked in undisbursed purgatory. Bringing desired liberation from economic servitude, empowering your business despite the pandemic’s fury; such are the hopes kindled by the Paycheck Protection Program.

Yet failure to cross every t or dot every i on those SBA forms could doom your loan to that tragic limbo of active undisbursed status. Heed the common mistakes that have derailed many an application, delaying the approval and vital funds you need.

Verify every number, gather every document, read every instruction – be meticulous. With care and diligence, your business can seize its rightful share of PPP money and mastery over its fate.

The power awaits.

Variations in the Document: SBA Form 1502 and Instructions

Variations in the Document: SBA Form 1502 and Instructions
The status code of active undisbursed means your PPP loan application has been approved and is just waiting for the funds to be disbursed. SBA form 1502 shows loan details and variations like status codes that indicate where you are in the loan process.

For PPP loans, status code 9 for active undisbursed means the funds are approved but not yet disbursed to your account.

Checking your status code on the lender’s 1502 form is crucial to understand if your PPP application is simply waiting for funds or if more information is needed for approval. Following the application instructions closely prevents delays so you achieve that coveted active undisbursed status.

With an approved undisbursed loan, liberation from financial uncertainty is within reach.


Applying for a PPP loan can be daunting, especially with the ever-changing rules and regulations. To streamline the process, it’s vital to understand the approval process and what active un-disbursed means.

For example, a small business owner in California recently applied for a PPP loan and wondered what “active un-disbursed” meant.

Active un-disbursed indicates the SBA approved the loan, and funds will come soon. Note that a promissory note doesn’t guarantee approval, and a hard credit check isn’t required for a PPP application.

To ensure approval, pay close attention to details, double-check all information, and watch for common mistakes. With this knowledge, applicants can rest assured that if their loan’s actively un-disbursed, they’ll soon get the money they need.

Avatar for Mutasim Sweileh

Mutasim Sweileh

Mutasim is an author and software engineer from the United States, I and a group of experts made this blog with the aim of answering all the unanswered questions to help as many people as possible.