Small business owners have until the end of March to apply for the remaining Paycheck Protection Program loans.
Having all of the needed information in hand and making sure it is accurate, plus knowing where to apply to, are the key factors in completing a successful application for these fast-moving loans, lenders said. And if everything is submitted in the proper form and there is no missing information, an application can be processed and the applicant can have the money in hand in a matter of days.
“The biggest consideration for the applicant is that accuracy is more important than speed” in the application process, Tim Crowley, regional president at San Antonio-based Frost Bank, said in a recent interview. He has been instrumental in Frost Bank’s PPP lending program in the first and second rounds of the federal stimulus acts.
If errors are made or if information is incomplete, it can take some time for the Small Business Administration to straighten it out, he said. Applicants need to prove they are eligible for the loans and show how many employees they have.
Banks are handling the loan applications, but approved SBA lenders that are not banks also are authorized to handle the loans, a fact that some financial advisors and small business owners still do not realize, according to Alexander Cohen, CEO of Liberty SBF, an SBA-approved lender,.
“Applicants and their advisors and accountants need to check the credentials of the lender to make sure the firm is SBA-approved,” Cohen said. Advisors can help clients select the right lender, and advisory firms also may apply for the loans for themselves, he added. SBA –approved national and regional lenders can be found here. Liberty has general information about the PPP loans here and a check list of things to do for potential applicants.
The application deadline of March 31 will probably be extended if funds remain, Cohen said.
The money was approved by Congress to help small businesses pay employees if they are laid off or the business is closed because of the pandemic. Under some circumstances, such as when employees are rehired, the loans can be forgiven. The second stimulus round provided $284 billion for PPP loans, and more than $100 billion remain.
About 20% of the applications handled by Liberty required some correction or addition, Cohen said, “But those applications do not sit out there long before they are fixed.”
Cohen said he feels the program is accomplishing what it was designed to accomplish regarding tiding businesses over and protecting jobs. He noted that Liberty processed 19,000 loans under the first round and has handled 9,000 so far during the second round.
“We did as much loan business in a month as we usually do in 18 months,” Cohen said.