Tweet
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
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
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
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
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.
Comment