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Surly Thread of Business Owners/Managers, Etc. & Current Business Climate


VABuckeye

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4 hours ago, shakahorn said:

Posted upthread, but lost (understandably) in the EIDl PPP mix.  

"The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) recently signed into law by the President of the United States provides significant relief to small businesses. It is important to note that the CARES Act provides immediate payment relief for all existing SBA section 7(a) loans and new loans made in the six months after the enactment date of March 27, 2020. SBA will cover six months of principal, interest and fees for which the borrowers will never be responsible for again"

from the link:

https://www.homestreet.com/business/small-business/sba-loans/sba-relief-funding

Homestreet emailed us before I even knew about this to tell us about it.  They also said they would refund any payments made after 3/27.  Since our payment is normally due on the first, we asked them to refund and they said 'no problem.'  Refund hasn't hit the bank account yet, but this was only last Thu 4/2.

 

Another question I feel dumb about - but have I read correctly SBA 7a loans cant be used for single or multi family purchase, or even to fund the renovations?  (Not being able to use it to fund a rehab seems odd. Oh well.). Have I read correctly it can be used for motels and hotels?  Are short term vacation rentals lumped in with hotels and motels?

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16 minutes ago, troph said:

Anyone have a beat on whether ICs or sole proprietors will have a different application? We are contemplating a low cost application process for them and are trying to figure it out in advance.

Don't know this answer and I asked one of the banks about it today as well. If you find anything out, let us know, please. I'll do the same.

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I might be missing something because I’m a small employer with less than 10 employees, but aren’t all of these care sba loans initially going directly through the sba? Why would the application process be expensive

PPP is through the banks. You can do it yourself. Some of want help, some want a lot more than application help including augmented decision making, financial modeling, etc.
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Surprised? At this point, who doesn't have free monitoring already?

https://www.kxan.com/investigations/loan-information-was-potentially-exposed-small-business-administration-says/?utm_medium=social&utm_source=facebook_KXAN_News

 The Small Business Administration now says a limited number of Economic Injury Disaster Loan applicants may have had their personal information exposed.[\quote]

 

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1 hour ago, troph said:

Anyone have a beat on whether ICs or sole proprietors will have a different application? We are contemplating a low cost application process for them and are trying to figure it out in advance.

Didn’t the final application Friday have a check box for both along with the entity check boxes? If so, I would think it is the same. I don’t have one with me to check.

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29 minutes ago, Brew said:

Didn’t the final application Friday have a check box for both along with the entity check boxes? If so, I would think it is the same. I don’t have one with me to check.

you're right it did.  still the app reads funny for an IC/SP with "average payroll" and "number of employees" but it can work.  average monthly payroll is the equivalent of average monthly income and number of employees..... hmmm, zero?  or 1 for themselves?  what do you think?

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1 hour ago, troph said:

you're right it did.  still the app reads funny for an IC/SP with "average payroll" and "number of employees" but it can work.  average monthly payroll is the equivalent of average monthly income and number of employees..... hmmm, zero?  or 1 for themselves?  what do you think?

Who knows with the way this mess has run so far.

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15 hours ago, troph said:

you're right it did.  still the app reads funny for an IC/SP with "average payroll" and "number of employees" but it can work.  average monthly payroll is the equivalent of average monthly income and number of employees..... hmmm, zero?  or 1 for themselves?  what do you think?

My business is open and doing fine.  Concerning this PPP, I have less than 10 employees but it fluctuates regardless of the world economy crashing.  I'm trying to figure out this whole "number of employee" thing, because I can lose 20% of my employees anytime.  Do we need the exact number of employees on June 30 as we did on March 15 or what?  It's kinda confusing.

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4 minutes ago, Spaulding Smails said:

Got a note from our banker this afternoon that we're approved.  They're waiting on direction from SBA and the Treasury regarding funding.  Sounds like the same update most of y'all are getting at this point. 

Who do you bank with?

SVB pushed back their goal of yesterday at 4pm PT and now just has “check back for updates” 

Anyone use a bank they don’t have an existing deposit and/or Lending relationship with?

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36 minutes ago, Frieda’s Boss said:

Who do you bank with?

SVB pushed back their goal of yesterday at 4pm PT and now just has “check back for updates” 

Anyone use a bank they don’t have an existing deposit and/or Lending relationship with?

I bank with Broadway.  As mentioned previously in this post, we switched about five years ago from BBVA.  I have all of my business banking for three businesses through them.  We finance all of our vehicle purchases through them and I have a revolving LOC.  Plus, my personal banking and mortgage is through them.  From a business perspective, the only thing we don't have with them is our mortgage on our building which is through a close friend's smaller bank.  It's been phenomenal to have a dedicated banker.  Not sure how much of that is just the fact that we do a decent volume of business with them and how much of that is their general level of service, but my perception is that Broadway is small enough to avoid the big bank bureaucracy, but large enough to have their shit together and offer good products, support, online banking, etc.  I can't say enough good things about Broadway as a whole leading up to this, and their service through this SBA PPP has been a reaffirmation of how well run they are. 

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Just talked to my banker and I'm still in the queue.  Said roughly 25% of the loans they've submitted have been approved so far.  He has no idea how far down the list I am, but the bank submitted 1600 loan apps since Friday.  I went in on Friday, so hopefully I'm coming up soon.

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1 minute ago, VABuckeye said:

A few posters on TigerDroppings have received funding for the PPP loan.  They were all dealing with smaller banks.  I'm PNC so I may be fucked for a few weeks.

I’m dealing with a few smaller banks. They have had everything they need since Friday plus required edits due to SBA changes over the weekend. Two businesses have worked with Chase. As of right now, not one confirmed loan number from the SBA for any entity on our end has come through. It’s frustrating, but being patient.

Here’s hoping you get yours, too.  

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Got an email from Chase this afternoon saying ACTION NEEDED.  They had an online form to fill out, asked questions about funds and how they'd be utilized, and had to upload payroll and supporting documents.  Said my request was received, it will be reviewed, and I will be notified by email.  Good luck to all.

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We have banks calling us now trying to figure out what should be included in the calculation. What a cluster. Big banks are saying one thing, small banks are saying the opposite. Small banks have funded loans, we have a number of clients with approval. As of yesterday, money was put on hold for 2-3 weeks until SBA paperwork is straight. SBA has told banks all loans will be funded, it’s not a race to be first. Loans funded prior to call yesterday were grandfathered and will be let go with minimum paperwork. Thoughts are everything will end up at 100% forgiveness as SBA is not going to be able to verify forgiveness calculations. Been another interesting few days.

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We have banks calling us now trying to figure out what should be included in the calculation. What a cluster. Big banks are saying one thing, small banks are saying the opposite. Small banks have funded loans, we have a number of clients with approval. As of yesterday, money was put on hold for 2-3 weeks until SBA paperwork is straight. SBA has told banks all loans will be funded, it’s not a race to be first. Loans funded prior to call yesterday were grandfathered and will be let go with minimum paperwork. Thoughts are everything will end up at 100% forgiveness as SBA is not going to be able to verify forgiveness calculations. Been another interesting few days.

We’ve had banks pushing apps through with little back and forth and banks with more back and forth. If they run this program through the banks they can theoretically police it but the standards will vary.
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32 minutes ago, Brew said:

We have banks calling us now trying to figure out what should be included in the calculation. What a cluster. Big banks are saying one thing, small banks are saying the opposite. Small banks have funded loans, we have a number of clients with approval. As of yesterday, money was put on hold for 2-3 weeks until SBA paperwork is straight. SBA has told banks all loans will be funded, it’s not a race to be first. Loans funded prior to call yesterday were grandfathered and will be let go with minimum paperwork. Thoughts are everything will end up at 100% forgiveness as SBA is not going to be able to verify forgiveness calculations. Been another interesting few days.

SBA cannot guarantee all loans will be funded unless Congress approves additional funds.

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2 hours ago, Chewbacca said:

SBA cannot guarantee all loans will be funded unless Congress approves additional funds.

I realize that, I’m just telling you what the SBA reps are telling the banks as of yesterday. They may have some sense of funding needs by now or they are just going by what they hear politically.

Edited by Brew
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I realize that, I’m just telling you what the SBA reps are telling the banks as of yesterday. They may have some sense of funding needs by now or they are just going by what they hear politically.
I'm sure they are just passing on what they hear, just voicing the reality of the situation.
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I received the same Chase Email about reapplying. After 100 or so attempts to get through the crashing site, got the application through. It's for 2.5X my monthly payroll excluding salaries over $100k. Just like the original statement. Funds have not been approved yet, but app has been accepted

My question is; Has anyone received $10K emergency EIDL funds yet? The ones supposed to arrive in 3 days. Or any news at all about their EIDL loan?

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Just now, Incredulity said:

paywall

Quote

Big banks took “free money’ in 2008. They’re turning their backs now on small businesses, SBA official says

“What they are saying is ‘I don’t give ... a hoot about the small businesses,’ " one SBA district director said in a candid call with business owners.

Small Business Administration director blasts banks over failure to quickly distribute loans

SBA Nevada district director Joseph Amato criticized big banks for failing to quickly distribute loans to small businesses during a web presentation. (The Washington Post)

By

Aaron Gregg and 

Renae Merle 

April 8, 2020 at 9:32 a.m. EDT

A high-level Small Business Administration official criticized several big banks over their reticence to get involved in a $349 billion federally subsidized small business lending program, in a recorded teleconference obtained by The Washington Post.

The comments from SBA Nevada district director Joseph Amato offer a rare candid glimpse behind the scenes at the frustrations federal officials face as they work with banks to quickly ramp up one of the most ambitious economic stimulus programs in American history. The webinar features Amato talking candidly about the $349 billion program on a Zoom teleconference that was recorded and provided to The Post.

SBA officials did not immediately provide comments for this story. Bank of America and Wells Fargo did not immediately return emails seeking comment.

Asked for comment, a JPMorgan Chase spokesperson referred to a conference call between Trump and industry executives Tuesday afternoon during which its co-president, Gordon Smith, said the bank had already taken 375,000 applications for $40 billion in loans.

Amato also said there are challenges with implementing the SBA’s disaster loans program, noting the small government agency is struggling to deal with more than 3 million loan applications it received in a matter of days.

He chided the big banks for taking bailout money in 2008, only to abandon small businesses at a time when funding is desperately needed.

Sign up for our Coronavirus Updates newsletter to track the outbreak. All stories linked in the newsletter are free to access.

“Some of the big banks … and this is just editorial … that had no problem taking billions of dollars of free money as bailout in 2008 are now the biggest banks that are resistant to helping small businesses,” Amato said.

He responded to widespread concerns that the largest U.S. banks are slow-walking their involvement in the Paycheck Protection Program, an important small businesses aid program. The SBA is trying to forge relationships with “non-bank lenders” because the major banks are limiting their involvement in the program, Amato said.

“We are trying to work quickly with national non-bank lenders and other sources that may make up the difference for the companies like, sadly, BofA, Wells Fargo and Chase that haven’t really stepped up to the plate to take on all the small businesses they can,” Amato said.

Addressing criticisms that the SBA did not release its regulatory documents quickly enough, Amato said: “So what they are saying is 'I don’t give … a hoot about the small businesses … what I care about is whether or not I have enough paperwork. It’s just crazy."

The comments came in an informational webinar posted online April 6. The Zoom teleconference was recorded and posted online by Faith Jones, a lawyer and small business consultant.

The Paycheck Protection Program uses federal money to back up private-sector bank loans at ultralow interest rates, and the opportunity to have the loan wiped away if business owners can keep paying their employees. The paycheck protection program relies on private lenders to set up the loans and hand out cash when it is needed. It is a critical piece of the recently-approved $2 trillion federal aid program known as the Cares Act.

How to get a small business loan under the $349 billion aid bill

The coronavirus has hit America’s small businesses like no other economic crisis in U.S. history, grinding America’s service-based economy to a halt as customers are ordered to stay at home. The economic tidal wave has been devastating for some of the country’s most vulnerable employers: Small retailers, bars and restaurants, entertainment venues and factory floors have shut their doors.

The crisis presents an unprecedented challenge for the Small Business Administration, a little-known federal agency best-known for underwriting bank loans. The agency is struggling to handle a historic influx of loan applications for its loan programs and is scrambling to write the rules for the $349 billion aid program while the program is already in motion.

The program got off to a rocky start when most big banks said they were not ready to begin processing applications last Friday when the Payment Protection Program launched.

Thousands flood banks as federal small-business loan program has a chaotic first day

Bank of America was alone among big banks to begin processing applications last Friday, earning it praise from President Trump. But the bank angered thousands of small business owners by initially only taking applications from customers it was already lending to.

Many other big banks have also limited applications to current business customers, causing angst among some small business owners that the money in the emergency fund would be exhausted before they found a lender.

Other banks, including JPMorgan Chase, said they needed more time to understand the program’s rules, which were released just hours before the program launched last week.

Citigroup, another large U.S. bank, is still not taking applications.

“Citi is working with the Small Business Administration to provide relief to Small Business owners. While we are working as quickly as we can, we are not yet able to accept applications for the Paycheck Protection Program,” the bank said.

Wells Fargo never formally began taking applications, but by Monday morning, said so many people had expressed preliminary interest that it had already reached the $10 billion cap it had set for loans under the program.

The banking industry has complained that the program has been plagued by confusing rules and unanswered questions. Even after borrowers’ applications are approved, money cannot be dispersed until the SBA finalizes the language they must include in the promissory notes. The SBA’s online system for inputting the applications has also been slow, banking industry officials say.

Mnuchin calls for $250 billion in additional spending for small business program

In the webinar this week, Amato criticized the major banks for turning down longtime customers at their moment of need.

“I can’t tell you how many phone calls I have where a doctor will call me, or a business owner will call me, and say ‘I’ve been with such and such bank for 25, 30, 40 years … and they say they aren’t taking my [Paycheck Protection Program] application because they’re not involved in the program,” he said. “That should tell you a lot about what that bank really is focused on but that’s just my editorializing.”

The Treasury Department and SBA have scrambled to address the industry concerns about the program’s structure, including raising the interest rate banks could charge to 1 percent from 0.5 percent. Big banks have been particularly concerned about the legal liability they could face if regulators later determined that the small businesses they lent to committed fraud. On Monday, the Treasury Department said banks could skip the typical vetting process for new loans when taking applications from new customers.

Former Federal Reserve chair Janet L. Yellen told House Democrats on a conference call earlier this week that banks would issue loans faster if it was clear they will not face lawsuits for fraud in the program. “Banks’ concern about liability could cause them to restrict the loans they initiate and engage in due diligence that could slow down payments,” Yellen told The Post.

Amato also responded to criticisms that the SBA’s regulatory process has not been clear enough. The SBA released its first regulation governing the program on Thursday evening, just hours before banks were expected to start offering loans. The rules have changed intermittently since Friday, and small business applicants say many of their questions remain unanswered.

“There is really no risk to the bank,” Amato said. “It just comes down to … the same banks that literally took billions of dollars with one page from [former Treasury Secretary Henry Paulson] are the ones saying the documentation isn’t clear enough for them.”

Amato also addressed delays to the agency’s disaster loans, a long-standing SBA loan program that is managed by the government rather than the banks. That program has received extra firepower through the Cares Act and is meant to distribute cash advances of up to $10,000 to provide businesses with short-term cash.

The program received more than 3 million applications in just three days, he said, and is struggling to deal with the backlog. The agency is bringing in an unspecified “third-party private resources” to help it meet the challenge, Amato said.

“They are muddling through it. If it were up to me I would write you a check tomorrow,” he told business owners. “But it is coming. … Be patient."

Dalton Bennett and Allie Caren contributed to this report.

Have a tip or story idea about how the government is handling the Cares Act and its response to economic fallout caused by the coronavirus? Send an email to

 

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One of my (tax) colleagues in Oklahoma, a local politician, is working his DC delegation over the purported drop from $10k to $1k per employee and the lack of payout. IOW, there will be Congressional pushback. 

Edited by Apep
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12 minutes ago, Apep said:

One of my (tax) colleagues in Oklahoma, a local politician, is working his DC delegation over the purported drop from $10k to $1k per employee and the lack of payout. IOW, there will be Congressional pushback. 

Not sure how far he will get.

As I mentioned previously, I believe this SBA effort to be massively underfunded. Given the likely number of requests, the downgrade from 10k to 1k was to be able to spread the funds out to all applications since they keep promising nobody will be turned away.

 

On another note, be vigilant on any electronic communications you receive on the topic of sba. Hackers and scammers are already on top of this requesting direct deposit info. I didn't find any written stories on it yet but have heard from colleagues of the emails out in the "wild".

Edited by pacman
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Yeah, I applied for the EIDL loan Monday morning of last week.  Absolutely nothing.  No confirmation email.  NADA.  And if we get the 10k, that would barely cover 1/3 of one month's expenses for our start up.  If they do 1k per employee, they can go fuck themselves as that won't even cover a fraction of our monthly payroll.  As usual, our government has royally fucked this whole situation up.  We're a dental office that is not considered "essential" and we are forced to close down... yet there are fucking car washes still open.  I'm all for social distancing and flattening the curve, but I'm going to full open in May and I don't give a fuck what mandates there are in place at that time.  I'm not going to lose 50-60k over the next 2-3 months when plenty of businesses are still open and running.  

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7 minutes ago, victory88 said:

Yeah, I applied for the EIDL loan Monday morning of last week.  Absolutely nothing.  No confirmation email.  NADA.  And if we get the 10k, that would barely cover 1/3 of one month's expenses for our start up.  If they do 1k per employee, they can go fuck themselves as that won't even cover a fraction of our monthly payroll.  As usual, our government has royally fucked this whole situation up.  We're a dental office that is not considered "essential" and we are forced to close down... yet there are fucking car washes still open.  I'm all for social distancing and flattening the curve, but I'm going to full open in May and I don't give a fuck what mandates there are in place at that time.  I'm not going to lose 50-60k over the next 2-3 months when plenty of businesses are still open and running.  

Have you looked into the ERC? you are right in the wheelhouse of our customer base taking advantage of ERC vs PPP.

Here is a link to our PPP vs ERC Tax Credit Analyzer- covid19.hiretech.com

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Our startup started having payroll in September of last year. From reading here and my interpretation of the rules we should Average Jan-Mar payroll x 2.5 to get our amount. Chase told us no, average Sep-Mar instead. Just a heads up for everyone else.

Edited by blacklab
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