Lenders knew that there would be a flood of applications on April 3, 2020, for the first rollout of the PPP Loans through the CARES (Coronavirus Aid Relief & Economic Security) Act. Yet, the influx still stunned the system, slowed the process, and sent worried small business owners scrambling. The process was then muddled by changing targets, rules, and regulations, and miscommunication between banks and the SBA and the Treasury Department.
All of that miscommunication trickled down to lenders and borrowers, leaving worried business owners wondering when they might see their money. The question lingers. With the coronavirus pandemic impacting small businesses nationwide, borrowers need their money to make ends meet during these critical months of isolation. While the White House announced via Twitter that PPP Loans had been disbursed, banks aren’t releasing numbers, the SBA won’t confirm the White House statement, and many approved small businesses are still waiting for funds.
If you are looking for information on how to navigate being a small business owner during a pandemic, Merchant Maverick’s coronavirus hub is a place to find updated content on everything from business insurance to information about PPP Loans. If you need other avenues for funding, read this post and then continue onto Small Business Loan Resources & Guides For Businesses Affected By The Coronavirus.
What’s The Holdup?
Bureaucracy, a flooded system, confusion about the terms, there are myriad reasons why the PPP Loans rollout has been riddled with inefficiencies and frustration. First, the allotted $350 billion for PPP Loans is simply not enough, and many of the larger banks limited who received that initial funding. Many banks simply do not have the capital to loan, and there was no information on when it would become available or how the government loan buyback program would work. The breakneck speed of this stimulus package almost ensured complications and mistakes, and to say it has been frustrating is an understatement when compared to the scope of this pandemic’s economic impact on small businesses.
It seems people working with larger banks are experiencing more of a holdup than people who went to credit unions or local banks. People might also find luck casting a wider net with lenders by using matchmaker sites, such as Lendio or Fundera.
When Can I Expect My PPP Funds?
Small business owners are making plans, and the government and lenders are scrambling to respond. An expression oft-used in education is the notion that you are building the plane while flying it, and that is how it feels right now for those wondering how to navigate the new small-business normal.
From what we can gather from reports from small businesses, a few who worked with local banks received funding this week. However, those stories are not the norm. Most small businesses with approvals are still waiting for funds, and some are concerned with the eight-week timeline. It appears the government is sticking with the mandate that 75% of the PPP funds should go back into payroll during the next eight weeks to qualify for loan forgiveness. However, most businesses seeking help have been shuttered or have significantly reduced hours due to the nation’s shelter-in-place orders, and laid-off employees can benefit from the generous unemployment funds, which leaves some small businesses worried about those loan terms.
There is no date to provide, no concrete answer, only guesses as to when the PPP funds will be widely distributed to approved lenders. Also, since it is becoming evident that the allotted $350 billion will not be enough, there are already discussions about additional legislation and stimulus money arriving soon. At the moment, all we can do is hold on, pay attention, and be ready to move quickly on informed decisions. If you are still waiting after approval, keep checking in with your lender but also know that they are working as fast as they are able on their end. Soon is not a good enough answer, but it is simply the best we have.
Tips To Get Funded Faster
There are a few things you can do on your end to smooth the process and eliminate hiccups, but if you have been approved and are waiting on funds, have solace that you are not alone in waiting and that all institutions are focused on getting you money quickly. If you are still waiting to apply, here are a few things that might help:
Tell Your Story Far & Wide
Some of the best advice out there from small business owners and lenders is to make this personal. It is personal. For a small business owner, life and business are intertwined: Your small business is your life, and your life is your small business. So, since small business owners are the heart and soul of this nation, now is the time to tell your story. Narratives are important to me, and if you read all my articles on this site, you will see my message clearly: Your story is the best marketing material you have. You are your brand, especially in a time when consumers want to help businesses in their community. Make it easy to know who you are, what your business supports, and how people can help. Then use that narrative and that energy to let a lender know what is at the heart of your application.
Have All Your Financial Records In Order
This is not the best time to discover that you have inaccurate books or disorganized records, but fortune will favor not just the bold but also those with excellent bookkeeping skills. You have to get your financial records in order and your taxes completed. Things will move faster if you have answers and numbers ready when asked.
Cast A Wide Net
It’s important to check with your local bank or a bank where you have an existing loan first. Anecdotally, some banks are working with pre-existing loan accounts first, although the message is that some of those banks have reversed their decision. Because this is a moving target, a few experts suggest that the more loan applications you make, the better chance you have of seeing some movement with at least one of them. With the worry about funding running out and some lenders changing priorities, it makes sense to inquire with several lenders. However, this is a strategy to see who can fund you faster, but you must make sure you do not apply for more than one loan. (Ask for institutions to contact you before submitting for approval, so you can make sure you do not accidentally apply for multiple loans, which would be fraud under the PPP Loans provisions.)
If the PPP Loans don’t appear to be a decent fit or the process is hindering business operations, check into other lending options from the CARES Act, such as the Economic Injury Disaster Loans. Stay tuned as we update this and other COVID-pandemic information as quickly as we are able, and feel free to ask questions or leave your own experiences in the comments.
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