SMALL BUSINESS INSIDER: The Latest on COVID-19 PPP and EIDL Loan Programs

By at 8 April, 2020, 8:07 am

(Read Kerrigan’s April 10 SMALL BUSINESS INSIDER Update on PPP, EIDL and Other News here.)

By Karen Kerrigan

The experiences of small business owners with regard to the Paycheck Protection Program (PPP) and “economic industry disaster loan” (EIDL) program has been erratic and confusing. It appears the PPP funds are slowly beginning to flow, but none of our members have received an EIDL loan or the $10,000 emergency advance (as of this writing on 4/7 at 12:00 noon.) Many applied several weeks ago for an EIDL. Some received an application number, others have not received any communication about the status of their application, not even acknowledgement of receipt. We understand that the SBA is under-the-gun and working hard to get these new programs launched, but many small businesses are making important decisions about the future of their businesses based upon EIDL eligibility.

More PPP Appropriations on the Way? Senate Majority Leader Mitch McConnell (R-KY) announced that he will work with Treasury Secretary Steven Mnuchin and Senator Chuck Schumer (D-NY) to approve more funding for PPP by unanimous consent or voice vote during the next scheduled Senate session this Thursday, April 9.

In addition to more money, I would argue the program needs changes, more flexibility and to amend some current rules to align with the intent of the legislation (see those thoughts below.)

With regard to PPP loans, we are hearing reports that small business members have heard from their local banks with some applications already approved and money forthcoming “hopefully soon.” In one case, the bank is not comfortable releasing funds until there is further clarification from SBA on signed documentation that would green light closing and distribution of funds.  Other small business owners cannot access PPP via their financial institution yet because lenders continue to build systems to operationalize the loans and online portals, or there’s been acknowledgement of receipt of their application but it is pending with no time-frame given for approval. Some banks cannot get their applications through the SBA’s E-Tran system due to volume.

Some small business customers have heard that banks have hit their “limits” on the number of PPP loans they will process, and these entrepreneurs have nowhere to turn to apply for funds.

FYI ALERT: Please make sure you are filling out the newer PPP loan application – updated April 2 – to avoid extra work (it is different from the original sample that was circulating prior to April 2.)

Onboarding Fintech: I watched Senator Marco Rubio (R-FL), Chairman of the Senate Committee on Small Business & Entrepreneurship, on CNBC Monday morning and I agree with his assessment that the PPP process will improve, more lenders will come on board, and more money will start flowing. The latter is most important.

Time is what most small businesses do not have.

That is why SBE Council strongly urges the U.S. Treasury to bring leading fintech companies – like Intuit, Square, PayPal and others – into the PPP program as they can service the significant number of small businesses that are falling through the cracks, and can deploy capital with speed. These companies have millions of small business customers and can use AI and their know-how to move capital quickly. This is a no-brainer.

Non-banked small businesses, or those who are on the lower end of the customer priority chain with lenders, or those who are customers of lenders still operationalizing their systems, or those who are customers of lenders that have decided not to participate in PPP  – these small businesses feel they will get cut out of funds. So, a solution – as I describe above – is needed to democratize access to PPP funds, and quickly.

Some other issues SBE Council is discussing with congressional leaders and the White House include:

● Regarding the EIDL program, SBA needs to provide small businesses that applied with information about the status of their application, where it is in the process, and when they can expect to hear about application approval or eligibility.

● The CARES Act reads that the $10,000 emergency advance would be dispersed within 2-3 days. Has this changed and what can small businesses realistically expect? We are also hearing that maybe (again maybe) the $10k advance will be scaled to $1k per-employee up to $10,000. We are running this rumor down now, and have heard from many media outlets asking about this unexpected limitation.

● It would be great if SBA can develop a real-time PPP lender-match portal. The current lender-match tool lists SBA approved lenders, but some of those listed are not participating or are still deciding about PPP participation. Others (like Wells Fargo) have hit their limit. On Fox Business Tuesday morning, Treasury Secretary Mnuchin said:

“We have over 3,000 lenders that are already participating. We couldn’t be more pleased with the broad appeal of this program.”

Small business owners who have been shut out of their own lending institutions’ PPP programs (because these lenders may have hit capacity or their limit for a number of reasons) want to know where else they can turn to.  Again, this is why it is important to bring leading fintech companies into PPP.

● With regard to the 8-week window for loan forgiveness as written in the CARES Act, we are urging more flexibility (and a possible extension) of the window beyond June 30th given the longer-than-expected duration of shut-down/stay-at-home orders in several states. For example, the state of Virginia has extended the stay-at-home order to June 10.

This means economic activity will continue to be stifled into the early summer and perhaps beyond. Is it possible to look at a 12-week window and a second round of funds for PPP recipients, or to use forgivable funds for other purposes as intended by the CARES Act so that small businesses have an actual brick-and-mortar store for employees to come back to? We support such flexibility and changes. (See below.)

● We are still advocating for 100% loan-forgiveness for non-payroll forgivable expenses as written in the CARES Act.  Keeping the DNA of the business intact is critical to the survival of America’s small business economy, and the 25% cap on non-payroll forgivable expenses hurts many types of brick-and-mortar small businesses and especially those in high-costs areas (restaurants, all sort of retail operations, dry cleaners, etc.) with significant rent and utility expenses. We believe the SBA and Treasury need to restore the intent of the legislation as written in the CARES Act.

● As noted above, leading fintech companies must be a part of the PPP delivery solution. These companies have existing financial relationships with millions of small businesses, and can help to deploy this needed capital more broadly, more diversely and with speed.

Taxes and the Tax Filing Season

There are many solid tax provisions in the CARES Act, and of course businesses have more time to file taxes and pay taxes, up until July 15. But you may want to crunch the numbers on your taxes now, and see if you are due a refund. If so, FILE NOW. Encourage family members and friends to do the same, as most filers are owed some $40-$50 billion in refunds and about three out of four taxpayers receive a refund. This money can help provide a cushion for your business, your family and of course any money that goes back into the economy will help many small businesses.

Our members have shown tremendous patience and resolve through all of this. I would remind small business owners to watch out for the scammers, and don’t pay anyone anything to take your application.  Please keep us updated on your loan application experiences by emailing Please put PPP/EIDL Loan Experience in the subject line.

We will continue to report back on changes, updates and breaking news as it affects small businesses and the entrepreneurial sector of our economy.

You are my heroes.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.


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