Paycheck Protection Program
The Floodgates Are About to Open
The Paycheck Protection Program (“Program”) is part of the government’s stimulus package. The application form and an accompanying “information sheet” were released on March 31, 2020. Click here to see them both. Here are a few important points:
- The $349 billion currently committed to the Program will probably not be sufficient to meet demand. The floodgates are about to open, and you need to be quick if you want to participate in the Program. You should be completing the application form now and assembling the required documentation.
- The “formal” start date for acceptance of applications is April 3, 2020. Most banks are not formally accepting applications yet – but that doesn’t mean that they might not accept your application ahead of time. You need to ask. If April 3, 2020 turns out to truly be the application submission date, it will be early on April 3, 2020.
- The Program is formally under the control of the SBA but will be administered by your local bankers. The banks that appear to have a “leg up” are banks that are currently approved SBA lenders. Among those big banks in our area are Wells Fargo, JP Morgan Chase, Citizens TD Bank and Bank of America. Not all banks have been approved to participate in the Program yet, and you should not assume that your bank is approved or will seek approval.
- There does not appear to be any downside to submitting multiple applications. However, you should generally go first to the bank that knows you. If it is participating in the Program, it generally has an incentive to favor your application. If it is not participating in the Program, your banker can give you the names of the local institutions that are participating and with which it is most closely associated.
- Make sure that your application is complete and accurate when it is first submitted. The persons reviewing applications won’t have the time that loan officers normally would to “clean things up” for you.
- The Program is generous, but, if you’ve already furloughed workers or significantly reduced their salaries, you may need to back-track in order to qualify for all of the loan forgiveness opportunities available to you. You need to work through the economics carefully.
For a government program, the Paycheck Protection Program is more straightforward than most, and you can do most of the work yourself. We have a team available at Eastburn and Gray, P.C. to help. If you or someone you know is interested in learning more, please contact Henry E. VanBlunk, Esq.