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Ghel 04-03-2020 04:24 PM

CF surrounding COVID-19 SBA loans
Some of you have probably heard/read about the new loans available through the Small Business Administration authorized by the CARES Act. Nearly any small business can apply starting today to get funds for payroll, rent, utilities, etc. so they can stay open during the pandemic. If 75% or more of the funds go to payroll and the business doesn't lay off any employees, the loan will be forgiven. It could be free money for small businesses.

The problem right now is that there's almost no guidance for banks to do these loans. The SBA has given us some rather vague handouts, including a very short application that requests almost no information from the applicant. We're supposed to collect payroll documentation to calculate how much of a loan the applicant qualifies for, but there's no guidance on what sort of documentation is acceptable or what to do with it. They couldn't tell us how long it would take to process the applications, either.

There's an aspect of MiM here, too. We knew this was coming. That today would be the first day businesses could apply. But the Senior Lender didn't verify until today whether we were currently an SBA lender or whether we had a sign-on for the SBA website so we could process applications. The SBA website requires you to log in at least once every 30 days or be locked out. If you don't log in for 45 days, your account gets deleted. So the lender who's supposed to be the coordinator for our bank on the SBA site got locked out. I didn't, since I have a reminder on my calendar. So the Senior Lender called in a panic asking if I could log in, and then if I could email him my sign-on information, so they could log in and start processing the 50 applications :eek: they'd already taken.

A bit later, the coordinator emailed me to ask if I'd received an email confirmation on the two applications she'd processed so far. I hadn't. Apparently SBA isn't sending automated responses to say they've received applications.

Applications are supposedly being processed first come first served, and when the funds are gone, no further applications will be taken. Everybody seems to be scrambling to get their applications in so they can get a piece of the pie. It doesn't help the panic that Ted sent out information last week already to any business customer that he thought might benefit from it. It wasn't completely altruistic, of course. The bank gets a fee for each of these loans we originate.

ETA: Our small-town bank isn't the only one having issues with this program: CNBC article

Ghel 04-06-2020 06:19 PM

Apparently, the SBA didn't expect quite the flood of applications they've been getting. Their website crashed this morning and hasn't come back yet.

Our main branch processed dozens of applications over the weekend before it crashed.

TheSHAD0W 04-07-2020 12:12 AM

Related, though tangential.

Nunavut Pants 04-07-2020 03:41 AM

One acquaintance of mine was ranting on FB how miserable the process was. And, of course, that the ever-nice and super ethical (/s) Wells Fargo was handling at least a chunk of it out here in CA.

Just a view from the other side of the process...

Ghel 04-07-2020 02:09 PM

Oh, the process is supposed to be simple, both for the lenders and the borrowers. But because this program was rushed through (which I understand, small businesses are hurting during this pandemic) there's very little information available.

Also, I discovered after the website came back up yesterday that the application part of the website sucks, too. They obviously copied the majority of it over from a different loan program, but they didn't take out the questions that don't apply. They just made it so they're not required. Some of the information pre-fills, but it pre-fills with the wrong information. And it just seems old. For example, it complains if you don't put slashes in dates or dashes in social security numbers. :rolleyes:

The applications we're submitting are being tentatively approved now. We're getting email confirmations. But we still don't have any idea when the loans will be funded.

Mental_Mouse 04-07-2020 03:10 PM

At least you have an interface. For the payments meant to tide individuals over... well, I E-filed my tax return through an actual accountant, so apparently the money is supposed to just magically land in my account. If it doesn't... then what? Let alone, say, the housecleaner who would normally have been coming today, that I pay in cash.

Ghel 04-08-2020 02:17 PM

Yeah, no one seems to know what's going on with that, either.

We had an "emergency" meeting this morning to go over the PPP. Bank President emailed the two loan officers who are working from home to call in (with 5 minutes to spare), but didn't email me or Branch Manager. :mad: Ted (who's one of the working from home folks) forwarded the email to Branch Manager and me with 2 minutes to spare. We missed the first few minutes of the meeting because of that.

According to a new email from the SBA yesterday (which nobody forwarded to us), we're supposed to be funding these loans within 5 business days. But a second email from this morning (which nobody forwarded to us) says this may change.

Nobody knows what documentation we're supposed to have for the loan files. What sort of note do we need? Do we need a guaranty from the owner? How about a borrowing resolution? Can we have customers e-sign? etc. It's very frustrating.

Victory Sabre 04-08-2020 08:23 PM

As a business owner, who went through the "process" of a SBA loan about a decade ago, I'll tell you that there's no way in hell that we would even consider doing it again. It's not worth the trouble.

Ghel 04-14-2020 06:29 PM

Now the main branch is sending us blank documents to complete for the PPP loans but with no instructions about how to complete them. :mad:

In fact, the employee who sent them just attached the pdf file to a blank email with a gibberish file name, and I thought she'd been caught by malware sending itself out via her email. But no, she thought it was appropriate to send out a couple random-seeming emails to all the lenders with no indication of what was attached.

dalesys 04-14-2020 06:32 PM


Quoth Ghel (Post 1389244)
.... But no, she thought it was appropriate to send out a couple random-seeming emails to all the lenders with no indication of what was attached.

Is you natcherly stupid or did you study real hard?

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