Treasury is enlisting banks, credit unions, and small business loan specialists like Fountainhead to get the money out quickly. But as the banks, the SBA and the government figure things out, franchisees and franchisors that qualify should get in line. Only those payroll costs, and other expenses identified in the program, incurred during the eight-week period following origination can be used to offset the loan amount (can be used to identify the amount for forgiveness).
But JPMorgan Chase, the country's largest lender, said Thursday it did not expect to begin accepting applications for the program Friday, as scheduled.
The Whitmer Administration announced businesses across the state are now able to apply for $349 billion in Paycheck Protection Program (PPP) forgivable loans through the U.S. Small Business Administration.
The Louisiana Bankers Association on Thursday asked for patience as business owners begin seeking federal loans to help them through COVID-19.
Hegreberg said that payroll information for the months prior to the crisis will be needed as documentation, along with rent payments, utility bills and other operating costs the business routinely incurs.
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Darryl DePriest, who was chief counsel for the SBA office that advocates for small business from 2015 to 2017, called the $349 billion "almost like a first installment" and predicted Congress will eventually appropriate more money.
The program will be available retroactive to February 15, according to the SBA. Businesses can borrow 2.5 times their average monthly payroll for the a year ago and spend it on common business expenses like employee compensation and some utilities and rent costs. The loans are backed by the U.S. Treasury.
The banks have moved employees into new departments - a logistical challenge given many employees are working remotely - just to potentially keep up with the flood of applications. "It's more of a retention game", said Ian Benton, a senior analyst at Javelin Strategy & Research that specializes in small business banking. It'll pay lenders 5 percent for loans under $350,000; 3 percent for loans greater than $350,000; and 1 percent for loans greater than $2 million.
The situation has been similar for borrower applications, whose requirements, forms and application processes are caught in a power struggle between the Treasury and SBA, according to Blake.
Small business owners can apply for the Paycheck Protection Program at any lending institution approved by the SBA to participate in the program.
More information about the Paycheck Protection Program can be found at www.pvbank.com/sbappp for Nebraska and Wyoming customers or www.bankmvb.com/sbappp for Colorado customers. ApplePie Capital is allowing borrowers to pre-apply, but hasn't given guidance on when processing will start. At 4 percent seen in other emergency loans, it's tricky, but at 1 percent it's hard to find someone to take over the loan, Hurn said. Additionally, cash-flow assistance available through the Coronaviurs Aid, Relief and Economic Security (CARES) Act helps small businesses stay afloat and helps keep workers from losing their livelihoods, Roberts says.
Hurn said he's anxious the program's Friday launch won't be reassuring to US businesses.
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