SBA PPP Loans Experiences?

[Outdoor1]

Curious if there are any other business owners out there who have been to your bank and applied for PPP loan.

What was the application process like?

Did you get any indication of when the funds would hit your bank acct?

Particularly interested to hear from anyone who has been through this with Chase.

 

[MichaelB]

A very close friend does accounting and taxes for small business. We spoke over the weekend multiple times on this. It seems the banks aren’t ready, so they’re taking applications but haven’t begun processing them or given out any money.

JPMC announced (in his area) they were taking applications, but then qualified those as “pre-applications”, more like line holders. BoA announced it was accepting applications only from current small business customers with credit lines or CC accounts already opened.

There is also confusing guidance regarding how much to lend. The banks may be on the hook for any misuse, abuse or fraud. If so, they will proceed very slowly.

 

[Scrapr]

It's going to be a mess. In normal times applications takes months to go through. I saw something that SBA had loaned max $30B and this package is $350B. Treasury delivered prelim guidance on Thursday, applications opened on Friday. I'm going to wait a couple weeks to go in to let things settle.

The other program supposedly gets $10k on receipt of application. But it's designed for different purposes. I don't know if you can use that for payroll

 

[Ian S]

I'm really puzzled as to why this is all being run through the SBA and not the IRS. The latter has tons of info already on all manner of firms from sole proprietors to LLC's to C-corps including income, expenses, and employees. Maybe it's just a way for banks to profit somehow from this whole disaster.

 

[Sunset]

The IRS has no experience loaning money.
They just give it out to scammers every year with regular tax returns. No need for them to have extra to give away to scammers.

 

[ncbill]

Sounds like I should get a few new EINs from the IRS online and apply for some loans for my various new small businesses.

 

[Ian S]

The IRS has no experience loaning money.
They just give it out to scammers every year with regular tax returns. No need for them to have extra to give away to scammers.

Wouldn't have to be loans since these SBA transactions will probably be forgiven anyway. Scammers would have to be pretty prescient to have set things up a year or two ago in anticipation of a handout by the IRS resulting from a pandemic in 2020. Even if there are a few scammers, why screw legitimate businesses who needs the money quickly?

 

[Ian S]

Sounds like I should get a few new EINs from the IRS online and apply for some loans for my various new small businesses.

Except that those new businesses will have no history and can easily be flagged for more intense scrutiny. Make the penalty for such fraud serious mandatory jail time and hire more IRS examiners to ferret it out.

 

[Luck_Club]

A very close friend does accounting and taxes for small business. We spoke over the weekend multiple times on this. It seems the banks aren’t ready, so they’re taking applications but haven’t begun processing them or given out any money.

JPMC announced (in his area) they were taking applications, but then qualified those as “pre-applications”, more like line holders. BoA announced it was accepting applications only from current small business customers with credit lines or CC accounts already opened.

There is also confusing guidance regarding how much to lend. The banks may be on the hook for any misuse, abuse or fraud. If so, they will proceed very slowly.

Second hand knowledge of 1 loan already approved and funded as of yesterday. This was out of an executive council group, which advised all member owners to apply, and they all did. They all expect to get very large forgivable loans in the 100's of thousands of dollars to cover payroll for 8 weeks.

 

[MichaelB]

Wouldn't have to be loans since these SBA transactions will probably be forgiven anyway. Scammers would have to be pretty prescient to have set things up a year or two ago in anticipation of a handout by the IRS resulting from a pandemic in 2020. Even if there are a few scammers, why screw legitimate businesses who needs the money quickly?

As I understand it, the business is eligible to borrow 2.5X the average monthly payroll cost of 2019. Unless an alternative is announced new businesses won't be eligible.


I agree with your comment on turnaround vs scammers. It's not clear how this will work out, but right now it appears the bank will be liable for fraud. If this is the case, fraud prevention will take precedence over timeliness.

 

[Ian S]

As I understand it, the business is eligible to borrow 2.5X the average monthly payroll cost of 2019. Unless an alternative is announced new businesses won't be eligible.


I agree with your comment on turnaround vs scammers. It's not clear how this will work out, but right now it appears the bank will be liable for fraud. If this is the case, fraud prevention will take precedence over timeliness.

When I had a small business (Chapter S Corp) we had to file a W3 along with copies of all W2's for the year by January 31 of the following year. These actually were filed with the SSA not the IRS but I'm sure the info gets shared. There's even a box on the W3 form where you input the total wages for the year. It seems so easy to just take that number and divide by 12 to get the average monthly payroll! Multiply by 2.5 and send out the check!

 

[LEDBET]

I know of one company that applied last Friday that was approved and funded today. They are acting quickly.

 

[Outdoor1]

That's great news! I'm hoping when I wake up tomorrow I will have a surprise in my bank acct. So I am commercial property landlord/manager and am telling all my people they need to apply for this before we can fully consider their relief pleading. BIG companies are going to be milking this I think. Companies can have up to 500 employees, to me that's pretty big. I do have some smaller mom and pops and I'm still telling them to do the PPP but am working with them more for the next 30-60 until we can see how things shake out. Some of the request are pretty eye opening, you'd think these commercial tenants don't have 30 days emergency funds

 

[aja8888]

My friend who owns 6 Burger Kings applied last week. Each time they brought a completed application to the bank, the bank said a revision was necessary due to changes in the forms - 4 TIMES did they resubmit!

 

[Running_Man]

Sounds like I should get a few new EINs from the IRS online and apply for some loans for my various new small businesses.

It is banks providing the loans which are being funded through the US Treasury who is working on behalf of the SBA who overseas the whole program and screwed most of it up as the banks have the risk of fraud on the loans yet get only 1% interest on the loan for the first year. Mosat banks are requiring a previous relationship and a previous filing of US identity if EIN number. You have zero chance of cheating in that way.

Did application for a 169 employee business that dealt with a mid major bank, application was not taken until Monday as the SBA and banks were arguing terms, actual terms of the loan and means of forgiveness are still negotiable between the SBA and Treasury. With 8 weeks of payroll and only forgiveable with 75% payroll costs a small business could easily get this loan, pay employees for eight weeks and then file for bankruptcy. You still need income in order to be successful, you just can't borrow your way to prosperity.

For business that is able to break even through this time and utilize all the money they will be able to convert 133% of their payroll to income and yet still be able to deduct the income as a tax expense and offset other income leading to a 50% margin on the forgiveness part of the loan, sweet deal if you can stay in business.

 

[socca]

The first PPP application certification is "Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant." So ... does this mean that only entities with weak balance sheets (i.e., not enough cash-on-hand to pay two months of W-2 wages) get loans? If so, then this is yet another example where a gov't in cash-distribution helicopter mode commits grave injustices. We can only hope that the good they do outweighs the evil.

 

[gindie]

I am a church treasurer.

I submitted an application for the PPP, but now am wondering if I gave the right numbers for payroll.

I submitted GROSS salary for everybody, instead of what would have been put in Box 1 for their W-2's. Box 1 would have included the cafeteria plan deductions that the employees chose to have deducted.

The reason I am wondering is because I also needed to send in my Form 941's for the past year and they reflect the Box 1 numbers.

Oh well.

 

[Backpacker]

gindie gross pay seems correct to me, as this is geared to the business, that is truly their expense. That the employee deferred some comp doesn't change the cost to the business.

 

[gcgang]

Our Country Club in Hawaii has not applied because they are a 501c7. They say they’re Not eligible, which is what the law seems to say.

In Montana, my former country club’s banker contacted them, also a 501c7, and they submitted the application.

I’m interested to find out if Montana gets funded.

 

[Z3Dreamer]

I am a church treasurer.

I submitted an application for the PPP, but now am wondering if I gave the right numbers for payroll.

I submitted GROSS salary for everybody, instead of what would have been put in Box 1 for their W-2's. Box 1 would have included the cafeteria plan deductions that the employees chose to have deducted.

The reason I am wondering is because I also needed to send in my Form 941's for the past year and they reflect the Box 1 numbers.

Oh well.

I am a church treasurer, too. We decided not to go the PPP route, but I talk with other churches and who knows, we might apply later. I would love to hear more details about your experience as a church applying.