What business owners are saying about the SBA coronavirus loans

Posted: 10 April 2020 7:34 pm News

Sign on a store that is temporarily closed due to the coronavirus.

Spoiler alert: Not one person we talked to has actually seen any money yet.

The SBA Paycheck Protection Program promised a fast turnaround on government-backed loans for small businesses affected by the coronavirus outbreak. And a new grant program for its Economic Injury Disaster Loans was meant to put up to $10,000 in small business’s hands as quickly as possible.

We spoke to eight small business owners around the country who applied for funding through these two programs. While the experience was relatively seamless for some, that wasn’t always the case. And none of the business owners we spoke with had been funded yet.

Below are their stories — answers have been edited for length and clarity.

WATCH: A non-profit consultant dishes out tips for getting approved

1. An IT company in Pennsylvania

  • Business owner: Jim Smith
  • Business name: Proper Sky
  • Location: Pennsylvania
  • Type of loan: SBA Paycheck Protection Program loan
  • Lender: Univest
  • Previous relationship with lender? Yes
  • How did you apply? Online
  • Have you heard back yet? Yes, but not for approval
  • How long has it been? 5 days

“We use Univest, a small local bank here in the Philadelphia region that’s both our SBA 7(a) lender and our credit line servicer. They responded back in hours on all of our emails. Looking around right now, it appears we were quite lucky. Univest has been an outstanding partner throughout this entire experience.

My office manager and I spent probably eight hours or so putting the documentation together. I applied online. Yesterday, I emailed to find out if I had a submission number, and I was told that the person I was dealing with wasn’t in charge of tracking the application numbers but that someone on their ‘quickly expanding PPP team’ was and would be in contact with me.

I haven’t received approval yet, but I’m optimistic.

My advice for other business owners looking to take out this loan would be get ahead of it, submit early, work with a local bank if possible. Make your model easily updatable. Gather any documentation that you think may be useful now to verify your costs, but keep it at the ready rather than bombarding the lender.

And be active in the community. I’ve learned more from my Goldman Sachs 10KSB alumni than pretty much anyone. Also, we’re all in this together.”

2. A recording studio in Pennsylvania

  • Business owner: Samori Coles
  • Business name: Lil’ Drummaboy Recordings
  • Location: Pennsylvania
  • Type of loan: SBA Paycheck Protection Program loan
  • Lender: PNC Bank
  • Previous relationship with lender? Yes
  • How did you apply? Online
  • Have you heard back yet? No
  • How long has it been? 2 business days

“This was a tricky process for us. Fifteen minutes after starting the application, we were kicked off the site. There is way too much traffic on the website right now since so many people are applying for these loans. Once we got back on, it took about an hour and 15 minutes to reload. Once everything was loaded, it took about 45 minutes to complete the application.

The websites are overloaded, which made it a very frustrating process. Some places have already run out of money, so it has cut the process short. The banks are completely overwhelmed with all of the small businesses that need assistance.

My advice to other businesses is to have a year’s worth of your payroll reports ready to upload. Also, have your payroll tax reports on hand for the last four quarters. All of this information is necessary, so having all of your supporting materials ready will speed up the process for you.”

3. A tech company in California

  • Business owner: Robert Chamberlin
  • Business name: Security 101
  • Location: California
  • Type of loan: SBA Paycheck Protection Program loan
  • Lender: An SBA lender
  • Previous relationship with lender? Yes
  • Have you heard back yet? Yes, I’ve been approved

“My banker was super helpful and gave me a list of documents that they would need to approve my loan, which included a personal financial statement, a list of current debts, payroll costs and financial statements. The SBA’s PPP application itself took 20 minutes or so, it was very straightforward. Unfortunately, that was the best part of the process so far.

The lender told me I was approved (I assume by them) on Monday, but I still don’t have a timeline or even next steps from them or the SBA. The bank is telling me the program is changing so fast that they are not sure about timing, which obviously isn’t the intent of the ’emergency’ relief that Congress intended.

It’s been fairly disappointing so far, and my three-day grant through the Economic Injury Disaster Loan (EIDL) program is still pending eight days later.”

4. A media company in Florida

  • Business owner: Greg Van Horn
  • Business name: Launch Potato and FinanceBuzz
  • Location: Florida
  • Type of loan: SBA Paycheck Protection Program loan
  • Lender: Chase
  • Previous relationship with lender? Yes
  • Have you heard back yet? No

“We have a great relationship with our banker, who kept us in the loop regarding when the application would become available, and to answer any questions we had throughout the application process. Our payroll provider, Gusto, built a specific document center to export the supporting documentation needed for the application, which was also extremely helpful.

We completed the application and provided supporting documentation within an hour. Because this program is new and moving quickly, there were a lot of changes before we could submit the application. As a result, we spent three days prior to the application being available to compile the data and supporting documentation based on the guidance published to the Treasury website.

It was helpful to have our financial analyst model out the PPP and then run detailed reconciliations using information from our payroll provider. It assured us the numbers were correct, and saved time in the future so we were prepared for any potential questions that arose regarding our application. Without that, it would have taken much more time to complete the application.”

5. A religious-based nonprofit in Florida

  • Business consultant: Bruce Gimbel
  • Nonprofit name: Lighthouse Ministries
  • Location: Florida
  • Type of loan: Paycheck Protection Program loan
  • Lender: Local bank that’s also an SBA lender
  • Previous relationship with lender? Yes
  • How did you apply? In person
  • Have you heard back yet? Yes, we were approved but it’s unclear how long it’ll take to receive the funds

“It took less than an hour to complete the application and about two hours to compile the documents. We were able to do this because we had all of our records kept within the agency. So we had immediate access to all relevant financial data in our in-house accounting office. If we hadn’t been organized, it could have taken days to pull all of the information together.

We submitted the application to the bank on Friday, April 3rd — the first day they started accepting PPP loan applications. And we heard that we were approved late in the evening on Thursday, April 8th. It’s still not clear when the funds will hit our bank account, though.

Nonprofits like our type of ministry should always be looking to build capacity so that their accounting and financial record-keeping are available when needed for new grant opportunities or funding through other governing authorities. This is what allowed us to jump so fast on this Paycheck Protection Program loan.”

6. A consulting firm in Texas

  • Business owner: Simone Adrianne
  • Business name: S.A.B Global Enterprise, holding company for SimoneAdrianne.com and The Emerson Group
  • Location: Texas
  • Type of loan: SBA Economic Injury Disaster Loan — both the old and new application
  • Have you heard back yet? No
  • How long has it been? 24 hours

“I applied for $25,000 — with $10,000 being requested as an advance, which will convert to a grant. The application only took about 20 minutes to complete because I had already collected the required financial information.

At this point in time, the program seems to be something that will be very helpful to small businesses. The application process is very straightforward and not very complex at all. But until applications are being completed along with funds being disbursed, it is very difficult to say what my final opinions of it will be.

My advice for other business owners looking to take out this loan is to not borrow more money than you know your business will be able to pay back. Again, this is a loan and not free money. Things are changing daily and very rapidly. The best thing you can do for your business right now is to stay informed about the details that apply to you. Also, understand that it will be a process, and we all have to exercise some patience as the pieces of the puzzle come together.”

7. A party boat company in Florida

  • Business owner: Drew Johnson
  • Business name: The Gut Program and Lagerhead Cycleboats
  • Location: Florida
  • Type of loan: SBA Economic Injury Disaster Loan
  • Have you heard back yet? Hasn’t submitted the application yet

“Even though we have a relationship with an existing bank for our current SBA loan, the Economic Injury Disaster Loan is done directly with the SBA itself. This means we have to start completely over with documents needed for the loan. This is going to take weeks for us to compile. Furthermore, each time we talk with the SBA — it is a different person, which is slowing down the process.

Being a current company with an SBA loan, this should have been way easier. Our bank and the SBA know who we are and that we were greatly affected by COVID-19. This should have been super easy to get the Paycheck Protection Program loan, and Economic Injury Disaster Loan and Grant. However, because they rushed it, they made mistakes that are costing everyone time in getting the funds. I hope they learn from this and have a process for when this happens again.

“My advice for others looking to get funding is to go through a bank you are already using. If you don’t have a bank, try to find a small local bank, as they are always looking for customers. I also wouldn’t rush into this — make sure it’s going to work for you and your business. I don’t think the money is going to run out like many people are saying.”

8. An events coordinator in North Carolina

  • Business owner: Kurt Perschke
  • Business name: Project Artists LTD
  • Location: North Carolina
  • Type of loan: SBA Economic Injury Disaster Loan Advance
  • Have you heard back? No
  • How long has it been? 4 days

“I applied for the Economic Injury Disaster Loan Advance, which is set at $10,000. My CPA advised me to apply for that immediately and come back to the more extended full SBA loan application after I had. The application for the EIDL Advance is exceptionally straightforward — it only requires two numbers from your tax return and no other documents! It took me about seven minutes to complete.

I’ve seen a lot of businesses confused between this and the Paycheck Protection Program loans, which is via banks. So many people don’t know this is the quickest option!”

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