Update on PPP LoansApril 8, 2020
As the nation’s banks have been responding to unprecedented loan requests under the new CARES Act Paycheck Protection Program, Senate Republicans and Democrats failed to come to an agreement over additional spending for the program on Thursday. Any legislation would require broad agreement to pass given many lawmakers are unable to travel to D.C. during the recess and are under various social distancing rules and restrictions.
NSBA has cautioned its members to move quickly where possible given the likelihood of the initial $350 billion program funds to run out.
Thus far, the loan program has encountered some serious hiccups—perhaps not surprising for a $350 Billion program trying to go from nothing to full implementation in 6 days—including technical issues with the online system banks are required to use to authorize the loans. That platform is the U.S. Small Business Administration’s “E-Tran” system which has repeatedly crashed, according to banks on Monday.
Late Tuesday afternoon, the SBA said it had received more than 275,000 applications valued at $75 billion since the program went into operation.
Banks also cited missing documentation templates from SBA necessary to close out the loans, so while countless loans have been filed, it is unclear how many have been closed and even less clear when small businesses can expect cash in hand.
NSBA is continuing to work with policymakers to ensure the program is accessible to small businesses who need it most. One key demographic which has not been aptly addressed is 1099 workers and sole proprietors, who are expected to be covered in forthcoming guidance on the loans and forgiveness policies.
“I am urging small businesses to try and be patient and persistent. The loans—which in most cases amount to grants—can be a major help for small businesses now when they need it most,” stated NSBA President and CEO Todd McCracken. “The unfortunate reality of getting a massive funding program off the ground is that there may be hiccups, but these hiccups need to be resolved quickly.”
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