According to Forbes, only 6% of small businesses received funds through the PPP loan program despite there being MANY more applicants. (https://www.forbes.com/sites/brockblake/2020/04/19/ppp-loans-good-bad-ugly/#5ef025707189)
We received PPP funding on Wednesday of last week for two different businesses (and I directly helped two other companies, who also got funded last week through different banks). There is now a 2nd round of funding all but certain to pass in the days to come as both Nancy Pelosi and the White House are sending signals that a deal is imminent.
Here is the BIGGEST TIP I can give in securing PPP funds if you’ve been unsuccessful thus far:
GET PICKY AND BE MORE ASSERTIVE
Here it is in one short paragraph (for those who want more detail, that’s below): find a SMALL BANK that’s participating in the PPP, make sure they’re SBA PREFERRED and do not have an INTERNAL PPP QUOTA, ask them directly if they will ANSWER YOUR EMAILS & PHONE CALLS. And then… become the “SNEAKY SQUEAKY” WHEEL.
- FIND A SMALL BANK
This was in the last post but I’ll reiterate it here. If you can help it, stay away from big national banks. Open a checking account right away with a smaller bank and submit a PPP application that includes all of the information I listed in the previous post: https://showroomtips.litliving.com/uncategorized/tips-on-getting-a-ppp-payment-protection-program-application-through-faster/
Even if you’ve submitted a PPP application to a large bank, submit another one to a smaller bank. Until you sign closing loan documents you’re not committed to any bank and you can back out of one – if by chance – both end up getting approval.
From what I’m hearing and reading, the track record for large banks on this PPP loan is awful. Bluntly, it looks like big banks don’t prioritize and are failing too many of their small business clients on these.
- SBA PREFERRED
SBA Preferred is an important term for you to ask your banker about. SBA Preferred lenders are able to submit applications to the SBA directly and without anywhere near the level of SBA underwriting and approval processing as required by non-preferred banks.
The SBA tried (and failed) to process approximately 70,000 PPP applications in the first few hours of the program. They only handled 60,000 applications all of last year! The SBA is not set up to process nearly as many PPP applications as they’re receiving. Going with an SBA Preferred bank bypasses most, if not all, SBA processing and the loans are approved without the SBA directly touching it. That’s like having a “fast pass” at a Disney park.
- AN INTERNAL PPP QUOTA
Some banks have set an internal quota, and that is bad for you. The minute the next round of funding is formally announced there will be another rush on banks (I predict it may be more intense than the last round because more small businesses are taking it seriously now and watched the funds drain out in a matter of hours last time). Banks with internal quotas will most likely have grossly under-estimated the demand… yet again.
(in my view, an internal quota is a bank’s way of saying “we’re under-staffed and don’t have the manpower to process all the applications coming at us… including yours.”)
- WILL YOU ANSWER MY CALLS?
Be direct on this one. Ask the loan officer you’ll be assigned to if he or she will answer your phone calls, or are they letting calls go to voicemail in order to deal with the rush? This is your business and livelihood… now isn’t the time to be bashful… ask them to honestly estimate how many phone calls and emails they’ll answer immediately or at very least respond to in the day that they are made.
If there’s hemming and hawing about this question, call more banks. It’s important that the bank will stay in communication with you because in order to be assertive, I recommend that you…
- BE THE “SNEAKY SQUEAKY” WHEEL
After submitting PPP applications to our bank (a small bank that is SBA Preferred and had no internal quota), I either called or emailed Tom – the loan officer assigned to us – at least once every day.
Now here’s where the “sneaky” comes in. I didn’t just call Tom up over and over to ask: “hey Tommo, just checking in, did’ya get our loan done yet?”
That would have gotten irritating in a hurry.
I stayed in contact by calling or emailing Tom with legitimate questions. Things like “how will we prove that we spent the funds on payroll?” or “do you know what the process will be to apply for loan forgiveness at the end?” or “can we pay 1099 contracted employees with these funds?”, and I asked a number of questions that were designed to get him to pull my paperwork back out, like “does it look like we did the second section of that application right?” etc.
Sending an email or calling Tom with lots of questions had a dual purpose:
- Get answers
- Keep us at the top of Tom’s mind and hopefully our application at the top of the stack.
The squeaky wheel gets the grease, but that doesn’t mean you have to be annoying, be “sneaky squeaky”.
Get picky and be more assertive my showroom friends. In addition to the tips in my previous post on the PPP, that is the best single advice I can give you. You’re now in competition with the 94% of small businesses who didn’t get PPP funding the first round. As unfortunate as it is that many will be left out, that’s the reality. Please don’t dawdle on this upcoming round and don’t leave it to chance. (and email me if you need help)