04/03/20 – PPP Application Launch
As you may have seen in the news, the launch of the Paycheck Protection Program application process has been chaotic and full of uncertainty. The Treasury published the two-page application form Tuesday night but failed to provide lenders with detailed guidance needed to actually administer the loans. Thursday evening (4/2/20) after business hours, the SBA posted to their website an “Interim Final Rule” that outlines the key provisions of the PPP. Banks were made aware of these new rules earlier that day, less than 12 hours before the date the program was supposed to launch. We’ve linked that document here.
The Interim Final Rule made several modifications to key provisions in the PPP that took many people by surprise but also failed to answer many open questions. A couple items they changed include the interest rate, which went from 0.5% to 1% and the calculation for monthly payroll. We’ve had many discussions with local lenders who were also surprised by some other last-minute changes. As a result, it is anticipated that we will see delays in this entire process. Large banks like Chase have already communicated that they will most likely not be able to process these loans on Friday as they are still awaiting guidance from the SBA. Many banks may not be participating in this program at all, while others may restrict their funding opportunities to current customers only.
We know you’re anxious to get your application submitted and we are committed to working with you to navigate this constantly changing process. Because we have seen many different requirements from one lending institution to the next, you might want to reach out to your particular bank to see what they are going to want you to submit along with the application. Once you know what they need, we are here to help get it all together.