I originally intended this post to be about the City of Chicago Small Business Resiliency Fund loan application process. And, well mostly, it is. But I learned a couple pretty important things over the past week of researching funding options for small businesses — something more general, and in a sense more important:
- Find a good lender immediately. As in, today.
- Get your financials ready. As in, today.
In the fast-paced world of obtaining small business resources during the COVID-19 crisis, preparedness is the word.
For example, in a webinar this morning, I found out that the City of Chicago’s program application will go live later today. And guess what: the funds are distributed first-come, first-served. I am not kidding. This means that businesses that already have a relationship with a banker or community fund will be able to navigate this maze more quickly than others — the same for businesses who are large enough to have an internal staff member or even an accountant to prepare the application, or the capital to hire a specialist.
With that said:
1) Finding a lender you trust seems to be the #1 most important thing you can do right now. A good lender is qualified to help you walk through the myriad funding options available, and may be able to predict what items will be needed to apply for specific programs, even before those programs have released guidance. (As an accountant, I am doing my best to get up-to-speed, but it’s simply not my area of expertise. I’m very good at helping pull together financial information for applications, however!)
2) The City Of Chicago Small Business Resiliency Fund presenter today encouraged everyone to apply, because it will connect you with a lender who can help you navigate the full landscape of options, not just this fund.
3) However, not all lenders are created equal. For example, lenders outside of Chicago will not know much about city-specific programs. And let’s face it, we’ve worked with a lot of banks and community funds, and some folks just have no idea what they’re doing (on a good day, not during a crisis, and without an overwhelming amount of information to evaluate). And I’ve heard from some clients that their usual lender isn’t even participating in the PPP program.
So, find a lender, now. Ask around to other small businesses to find out who they use. Ask your bank. If you already have an SBA or other loan, reach out to your loan officer (presuming you’ve had a good experience with them). Sometimes a big bank will be the better choice, sometimes the smaller community bank in your neighborhood, sometimes a community lending organization. Cross-reference by checking the SBA website “find a lender” tool. I don’t know a single decent one so far, so if you find somebody you like, please introduce me!
UPDATE 4/1 — A few clients have responded with recommendations: Chase, Wintrust, Radius Bank, Huntington Bank, Bank of America… all of them do 7(a) loans quite consistently so they are used to the documentation requirements, and can quickly pivot to offer PPP loans. These SBA “preferred lenders” (rather than just “certified lenders”) seem to be ready to take documentation Friday and issue loans ASAP thereafter.
And as for getting your financials together, here’s a list to get you started for any loan or grant:
- Bank statements for the past year
- Most recent business tax return (sole prop, partnership, S-Corp, C-Corp, Co-op, Not-For-Profit)
- QuickBooks Profit & Loss and Balance Sheet comparative reports for the past 3 years
(you can run one report for 1/1/17-2/29/20 and change the columns to “Years”; make sure to run these on cash- or accrual-basis to match your tax return) - W-2s for 2019 and payroll reports for 2019 and the first quarter of 2020
Rather than include my specific notes on the City of Chicago Small Business Resiliency Fund application process below, as originally intended, I’m going to link to them here as soon as I can (done!), so that I can get this info out ASAP to all small businesses that may need this guidance, not just those in Chicago.
Get on it!
If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.