The popular and problematic Paycheck Protection Program is up and running again starting 10:30 am tomorrow, Monday, April 26th.
But given the number of client emails and texts I’ve received today on the topic, I realized that there is still a lot of confusion about what a small business’s next steps should be. So here are a few urgent reminders:
Apply Today — Do Not Wait Until Tomorrow
The SBA is opening their e-Tran system Monday, April 26th at 10:30 am — that’s when banks and other lenders are able to begin submitting their completed application packages from customers. In other words, don’t wait until tomorrow to apply. Make sure your bank has your information ready-to-submit the moment e-Tran goes live. If you haven’t already applied (or cannot find out the status of your existing application), get your completed information to your (possibly new) chosen lender today. This means pull together all your documentation now and submit it in one package. Do your banker and yourself a favor and avoid delays that will require them to follow up with you for missing information.
Confirm Status of Existing Applications
Because the PPP has gone through so much flux and so many iterations and guidance/ FAQ releases, a lot of early applications seem to have gotten “stuck” — the banks were not prepared for how to communicate with so many customers at-once, so in cases where there was missing documentation, some applications were held up in limbo. Most banks have been working through those piles frantically since the program ran out of money, in order to be ready for the second tranche — but if you have not yet heard from your lender about the status of your application, it’s time to check in with them now. Many banks, including Chase, have (finally) included a link to application status information on the customer landing page (you must sign in first).
If you have access to a real human being, such as a branch manager or loan officer, try reaching out to them if the usual channels aren’t working. I had one client show up in-person one morning when the bank opened — they initially told him they couldn’t assist with PPP issues; then he explained his unique situation, and it turned out they were able to fix the problem. But please remember — I beg you — that these are real people. They are overworked, are sometimes given poor training, do not have enough hours in the day to analyze the constantly-changing guidance thrown at them, and are often being forced to come into an office without sufficient PPE or social-distancing opportunities. They are exhausted, anxious, and yelling at them will not help. It’s not their fault that Congress wrote a sloppy law that allowed multi-million-dollar companies to access money that was theoretically meant for you. Be nice.
Apply With Multiple Lenders If Your Application Has Stalled
There has been a lot of confusion here — the rules still aren’t quite clear. According to many unofficial sources (most of them lenders), you may apply with multiple companies. What the law indicates is that you may not accept more than one loan.
So there’s a lot of complexity here. Obviously, applying with multiple lenders clogs up the system for other applicants. And while multiple applications aren’t against the rules, some banks are claiming that they could result in applications being voided or delayed.
But if not all lenders — and not all staff processing these loans — are created equal, then why should you be penalized because your bank (or more likely, your small business department within your bank) doesn’t have its act together? My advice (unofficial “don’t sue me” advice), at least to my own clients, is that if your bank isn’t communicating with you — if you don’t know the status of your existing application and have no idea if it’s even being moved forward — then by all means reach out to one or more other lenders.
From Brit Morse in a recent article in Inc.:
But that doesn’t mean you should only apply at a single lender. The chaos of the program’s roll out along with the fact that different banks have deployed different resources and processes to address the influx of these loans, might necessitate applying at multiple lenders.
If you have the opportunity, you may wish to request a guarantee that they’ll reach out to you before submitting your file to SBA, to make sure that a fraud alert isn’t triggered, holding up all your applications.
List of Lenders and Partners Still Accepting Applications
I will not be able to keep this list updated, but as of now, here are some recommendations I’ve compiled from various sources.
FinTech companies with access to multiple lenders seem to be doing the best job getting these things turned around fast. Here’s an article from Inc. on the topic, with a good list.
Forbes is also maintaining an updated list of banks and FinTech offering access to the loans (scroll to the bottom for the list and links to FinTech).
Also, for clients using the Gusto payroll platform, they have been offering since almost the beginning to connect its customers with lenders. Go here and then sign in — you’ll be given the option to submit your info.
And here’s Gusto‘s public list of lenders that are certified for PPP loans. I went through the list and pulled out the ones indicating they are still accepting applications from non-customers:
Cross River Bank – I have had folks reporting good success with them.
Divvy – Fintech company that has access to multiple lenders.
First Bank
Fulton Bank
Fundera – I have had folks reporting good success with them. Fintech company that has access to multiple lenders.
Funding Circle – Fintech company that has access to multiple lenders.
Kabbage – Fintech company that has access to multiple lenders.
Solera National Bank
Womply – Fintech company that has access to multiple lenders.
Zions Bank
If You Need The Money, Apply — Even If You’re Late To The Game
This second round is expected to go quickly, but don’t let that discourage you from applying. Rob Scott, a regional administrator for the SBA, told CNBC that “If someone didn’t qualify or didn’t apply, they should absolutely apply for the second round.” (Of course, this is insensitive blockhead who also said, “Overwhelmingly, the funds have been used for what it has been intended to do,” Scott said. “There are outliers. There are outliers in every program.”)
The SBA did not maintain a queue after money for the first tranche ran out — any application that was in-process was dumped. So when lenders go to the e-Tran system on Monday, they’ll be evenly-matched.
We have no way of knowing how long this disaster will last, and whether there will be a third wave of funding at some point. From Business Journal Daily:
“Whether there is a third round of funding – Bank of America has suggested it would take $900 billion in relief to get all small businesses the money they need – will likely be determined closer toward the end of the second round.”
This will give you an opportunity to build a relationship with a lender that may prove helpful in the future in ways you can’t predict.
Forgiveness? Not So Fast.
I keep working on a spreadsheet to help my clients determine how best to spend their PPP funds for maximum forgiveness — and it keeps changing with each morsel of guidance we receive from the Treasury and SBA. For now, just know that for businesses that already received their funds, the SBA is working on developing the guidance for how business owners will prove they retained staff to have their loan forgiven. I’m sure I’ll be posting plenty on that here on my blog in the upcoming weeks.
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.