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Small Business Support Group (1 Viewer)
- Thread starter ericttspikes
- Start date
Nick Vermeil
Footballguy
Run the calculation and see what you come up with and then see if you can spend it in 8 weeks.
mr roboto
Footballguy
E-Z Glider
Footballguy
Yes, but you need to understand them both. You cant spend EIDL money on payroll and also get the PPP to spend on payroll.
EIDL is from the SBA. PPP is from your local lender (if SBA certified) and is forgiveable.
E-Z Glider
Footballguy
You can/should apply for the loan NOW. Once approved that money is earmarked for you. Your 8-week clock doesnt start until you actually settle.
In theory, you could delay your settlement until June 30. You would re-hire everyone back on June 29 and start your 8-week clock then. Employees would collect unemployment until June 29.
Nick Vermeil
Footballguy
The 8 week threshold is the time frame that you have to spend it to have the loan forgiven (some debate about the percentage, but our legal team is saying 100%). You have to spend 75% of loan on payroll and the other 25% on rent or interest payments or other qualifying expenses in that 8 weeks to be forgiven. If you don't spend it, the interest rate is very low with no payments for 6 months. If the business folds in that time, no individual is liable. It's a no brainer in my opinion.
E-Z Glider
Footballguy
According to our bank rep, the SBA announced some process and applications changes late last night and the lender portal is not yet open. Hopefully no drastic changes.
Nick Vermeil
Footballguy
E-Z Glider
Footballguy
Had a conference call with our bank rep last night. One of the things he said is that banks all have a limit to how much they can lend and that ultimately, they are on the hook if a loan defaults. This means that banks are going to want to loan the money out first to existing clients that already have good credit history (and preferably an active loan application on file). So if you have history with an SBA credited bank, this is going to be your best option. Banks arent likely to take on new clients until they exhaust all of their existing clients first.
Another thing he said (which completely makes sense) is that they are not just going to dump a pile of money into your account. Once you are approved, that loan is "available" to you, but you will need to make draws when you need them. In other words, every 2 weeks we'll send an email to our lender and say "we need $X amount to cover payroll this week" and they will deposit that much into our account. Just an extra layer of auditing on the loan.
Nick Vermeil
Footballguy
Interesting. Had not heard that they are on the hook for loan defaults, in fact have heard the opposite. Who the hell would want to make these loans in that case?
One thing is for sure, this is a #### show.
This is 100% contrary to everything currently out there right now. There’s positively no way the local lenders are going to be on the hook for defaults under this program.
I also really doubt you’re going to have to take draws for each expense incurred over 8 weeks. That would be a pretty disastrous administrative nightmare for lenders in terms of quantity of requests they’d be receiving from businesses who may need those funds immediately.
E-Z Glider
Footballguy
It may not be 100% and the government is certainly offering them some nice incentives to facilitate the loans, but there is some degree of responsibility by the banks and they will be more cautious because of it.
E-Z Glider
Footballguy
Obviously nothing is official at this point till you sign on the dotted line. Still some details being worked out.
I imagine this will depend on the size of the loan. If you're getting $10K, they'll probably drop it in your account. If you're getting $10 million, Im guessing they wont.
Nick Vermeil
Footballguy
Important small business request: Need a link to your avatar gif. Haven't seen that in a long time.
E-Z Glider
Footballguy
Not sure how to do that. She used to bounce. 
Pipes
Footballguy
This is a ####show of epic proportions. I work for a payroll/hr company with about 800 clients all over the country. We're getting slammed with requests for info. And it's not like we can just send them a standard report or two as different banks are asking for and insisting on different things. Heard from a number of banks this morning doubtful the applications will go live today.
E-Z Glider
Footballguy
FYI - The SBA updated their application late last night so there is a new application that will need to be filled out (looks similar at first glance). Our bank also provided us with a payroll calculator for all applicants that we need to submit with our application, but I believe this is specific to our bank/account. He also added that "at this time, the SBA is not yet accepting applications".
Chemical X
Footballguy
Starting today, with the issuance of the final rule, borrowers cannot apply for both an Economic Injury Disaster Loan (EIDL) and a PPP loan:
Note, if a borrower received an EIDL between January 31, 2020 and April 3, 2020 it does NOT impact their ability to apply for a PPP loan
If an EIDL loan received between January 31, 2020 and April 3, 2020 was used for payroll costs, your PPP loan must be used to refinance your EIDL loan (and the amount of the PPP loan is increased by the outstanding EIDL, subject to the $10mm cap)
If an EIDL was received prior to January 31, 2020, borrowers cannot apply for a PPP loan
Eligibility for PPP is narrowed from previous interpretations Small businesses must not be operating in ineligible industries or pursuing ineligible activities as defined under the normal SBA 7(a) rules. At a summary level, that prohibits PPP loans to businesses that are:
Further detail on ineligible businesses is available starting on page 105 of the SBA’s Lender and Development Company Loan Programs guide.
NAICs-based test for businesses with greater than 500 employee is limited to the employee size thresholds (e.g., not including previously articulated revenue size thresholds)
Interest rate on the loan has changed from 0.50% to 1.00%
Note, if a borrower received an EIDL between January 31, 2020 and April 3, 2020 it does NOT impact their ability to apply for a PPP loan
If an EIDL loan received between January 31, 2020 and April 3, 2020 was used for payroll costs, your PPP loan must be used to refinance your EIDL loan (and the amount of the PPP loan is increased by the outstanding EIDL, subject to the $10mm cap)
If an EIDL was received prior to January 31, 2020, borrowers cannot apply for a PPP loan
Eligibility for PPP is narrowed from previous interpretations Small businesses must not be operating in ineligible industries or pursuing ineligible activities as defined under the normal SBA 7(a) rules. At a summary level, that prohibits PPP loans to businesses that are:
Further detail on ineligible businesses is available starting on page 105 of the SBA’s Lender and Development Company Loan Programs guide.
NAICs-based test for businesses with greater than 500 employee is limited to the employee size thresholds (e.g., not including previously articulated revenue size thresholds)
Interest rate on the loan has changed from 0.50% to 1.00%
ericttspikes
Footballguy
Thanks for this. I assume you can apply for both, but just not accept them both if offered, right?
Chemical X
Footballguy
glvsav37
Footballguy
So what...I applied the SBA loan the other day, and now they are saying b/c of that I screwed myself out of the Payroll loan?
Is there a way to pull the SBA application?
This is such a cluster Fudge
ericttspikes
Footballguy
I'm personally applying for both. From a video conference with our State Rep. and the head of the SBA, they said to just apply for anything that comes down the pike. You can decline if you are offered anything. That was two weeks ago, but based on how horribly the SBA handled the EIDL, I doubt anyone knows if anything they submitted will even be processed. The SBA EIDL application process was just a black hole. Fill it out and hope for the best. No confirmation that they even got my application. It's looking like the PPP isn't shaping up to be much better. Our bank is Chase, and I'm not even clear if they are taking applications or not. Their CARES page is crashed currently. I kind of hoped Chase would have capacity unlike the SBA did. The sad thing is that the Fed just dropped $4 trillion and I really don't expect to see any of it.
Last edited by a moderator:
glvsav37
Footballguy
yea, thats the problem....no set guidelines. lots of high-level people saying 'just do this..." and I'm sure they will not be standing there taking responsibility in 2 months when someone loses out on something.
Same position here as CFO for a small business. Positively stressful times. Luckily I had been putting together what I anticipated the requirements to be since late last week so when I received formal guidance from our lender at 9:30am today, I had revisions made and everything submitted by 11:30am.
I immediately asked my wife if it was too early to start drinking. Horrible stress. Needless to say, I know how your wife is feeling. And if she’s just starting on this today, it’s going to be a terrible day for you. Sorry. Good luck.
jamny
Footballguy
No she had all the forms yesterday and was up ready at 8am to start, with a phone line ready with the bank for any assistance. Thankfully, it seems that Bank of America had the best handle on this so, outside of a few issues, it seems to be good but it was a tough morning.
We saved a half bottle of wine for lunch today but opened another. She clearly deserved it. She tried to talk her boss out of it but his lawyers convinced him to take the "free money" while he could. She's not happy about it but did what she had to.
Chemical X
Footballguy
i am working 24/7 now waiting for portal to open......
Grahamburn
Footballguy
Nick Vermeil
Footballguy
I was horrible at updating. We got in with chase but it feels more like an application to apply. Follow up paperwork on Monday.
Shula-holic
Footballguy
Just finished our application tonight for the PPP. Our bank's site was overloaded all day so had to stay up and do this late at night. I think we had every document but the 1099 schedule to upload. S-Corp structure, I'm basically the only full time employee.Nipsey said:
Chemical X
Footballguy
boa and chase reported as up. we are up, with glitches. make sure you don’t double apply or get greedy going to multiple banks. we discussed potential fraud and it’s on applicants to remain honest and show their work, so to speak.
E-Z Glider
Footballguy
Submitted everything about 7:00pm last night. Got a reply around 8:00 from our bank rep indicating that our loan had been “internally approved” and was being sent to SBA for final approval. No complaints with the process so far.
Chemical X
Footballguy
from what i’m told there is no “approval”. i don’t think reg b is in play here. if you qualify, you are in. so long as you have the backup.
E-Z Glider
Footballguy
This was the lingo our rep used. Honestly, I’m not concerned at all. We have a great relationship with our bank and they’ve been very helpful and responsive every step so far. It’s been a huge relief.
Good luck to all applying/applied and thanks to you and others helping to facilitate!
Chemical X
Footballguy
Heard a rumour that BoA only taking applications if you have an existing loan with them. A checking or savings account won't get you the money.
Makes total sense. They want to protect those loans by any means possible. Obtaining free money from the PPP for customers with other non-guaranteed debt is a no-brainer business decision.
Chemical X
Footballguy
Mr Anonymous
Footballguy
ericttspikes
Footballguy
We're Chase also. I filled out the 2 second form on Friday; Business name, Name, EIN#. Hit submit and then it said someone will call me. Not exactly a hopeful feeling. Where did you get information about submitting paperwork on Monday?Nick Vermeil said:
Nick Vermeil
Footballguy
Our bank rep. The application was submitted but we'll have to follow up Monday with supporting documents to prove the numbers. I’m marginally hopeful.
ericttspikes
Footballguy
Thanks. Please let us Chase people know how that process goes. I was told from our Chase rep that everything needed be done online and to not at the branch or on the phone. I'll reach out to them Monday to see if that's changed.
Chemical X
Footballguy
Chemical X
Footballguy
don’t confuse a contact form with the application portal and process. thinking someone will contact you is asking to be ignored.
Mr Anonymous
Footballguy
That's good to know. My business banking is done with US Bank and they're the one who has been sending me the updates. They also told me that I'd be sent the invitation to apply via them. Do you have a link by chance?
