Small Business Coronavirus Loans
Beginning April 3, 2020, small businesses can apply for loans funded as part of the The Coronavirus Aid, Relief, and Economic Security Act (CARES Act). These loans are low cost, and some or all of it can be forgiven. This includes the Paycheck Protection Program (PPP) which provides loans up to $10 million to qualified small businesses. If you wish to get your small business application into the program, here are some suggestions.
Small Business Administration (SBA) is administering. Not the Treasury Department or other government agency. So the SBA and your bank are the best places to get first-hand information on the program. While banks have information, they are swamped, so first check the SBA website for more info.
SBA banks are on the front line. This is where you go to get an application filed for loan approval into the program, so work with a bank that is good at this process. Start with your business banker and go from there.
The risk to your bank could be high. The SBA loan guarantee is critical for your bank. If they mess up, the guarantee goes away, and they are on the line for the loss. So the risk is high for your bank and the reward is low.
High demand, means low availability. The SBA loan processing system is not developed to handle the volume they are receiving. This includes banks handling SBA transactions. So be patient and turn their requests around quickly and accurately.
Remember to ask for help if you need it. You want to do this right the first time, even with changing rules and constantly evolving requirements.