PPP Application: 7 Lessons Learned by Jody A. Ruth

The dust hasn’t settled, but at least it has stopped swirling for the initial round of Paycheck Protection Program (PPP) applications.  If your application didn’t get through the process during Round 1—or you didn’t file, but are planning to file in Round 2 if, and when additional funds are appropriated—then here are seven lessons learned you should consider. These lessons are based on what we’ve seen our clients experience, what we’ve learned from the bankers we work with, and talking with our professional peers.

  1. Do you need to talk to someone for accurate information?  Many of the largest banks have a process that requires you to wait for them to get in touch with you. So at any point, you may not have clarity as to where your application is in the process.  In fact, in one case, a promissory note just showed up—the applicant didn’t even know the application was being worked, let alone approved.  Many community banks have a relationship manager, or someone else who can provide a bit more information about what is happening at each step.
  2. Would it be beneficial for your company to have a new or additional banking relationship? If so, many community banks have processed the applications put in by their own customers and are willing to accept some non-customer applications, with the expectation that the applicant becomes a business banking customer. Ask your CPA, other advisors, and fellow business owners for an introduction.
  3. Consider FinTech lenders. Several FinTech  companies are approved to accept PPP applications including PayPal, Stripe, and Kabbage.com.  Click here https://www.sba.gov/paycheckprotection/find to find an SBA Approved PPP Lender.  The easiest, fastest experience that we’ve seen was through a FinTech lender, with about 24 hours from application through approval, execution of the promissory note, and an email notifying the loan would be funded.  Funding occurred about 2 days later.  
  4. Stay Current on the Calculation of  Payroll Cost and other Requirements. Since the PPP program went live on 4/3/2020, additional guidance, FAQs, and other clarifying information has come out almost daily.  Some of that information changed the calculation by 25 – 30%.  If and when additional funding is approved, it may have additional requirements AND guidance is still being issued, even after Round 1 closed, for the existing program.  Make sure you file your application using the most current information.
  5. Timing Varies Widely. One of the largest banks didn’t get any of our clients processed, even through the application was submitted on April 3rd.  Another large bank processed a later filed application before an application filed a week earlier.  Community banks consistently approve applications, and the FinTech players are the clear standouts on the timing side.
  6. Proceed with Caution if you Consider Filing with Multiple SBA Lenders. You may be tempted to file an application with multiple lenders to improve your chance of getting approved before additional appropriations (if and when they are approved) run out. Feedback from SBA representatives is when SBA gets more than one application from the same applicant, it will deny them all.  If you are switching lenders mid-process, be sure the first lender pulls your application.
  7. Some Lenders are Accepting Applications for the Anticipated Round 2 Now. Some community banks and FinTech lenders are accepting applications for Round 2 and are even willing to process the loans so they are ready for immediate submission to the SBA, if and when additional funding is approved. For FinTech lenders, simply go to their website, and it will say what they are doing. For community banks, you probably need to know someone at the bank to get ‘in.’ Talk to your CPA, other advisors, and fellow business owners to get an introduction, or to ask on your behalf.


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