"The legislation, approved 388-5, would restart a small-business loan program that was swamped by demand and allocate more money for health-care providers and virus testing. The vote was historic, as many lawmakers wore masks on the House floor, some even speaking through face coverings as they delivered impassioned remarks."
What follows is more information about what was planned for this package, as well as links to our resources for businesses looking to use the Paycheck Protection Program and other opportunities afforded by this and and the previous stimulus bill.
As soon as the CARES Act (or Coronavirus Aid, Relief, and Economic Security Act) rolled out last month, there was already clamor suggesting that it would not do enough to mitigate the economic impact of coronavirus.
At the center of this historic legislation was $349 billion in small business economic relief called the Paycheck Protection Program (PPP) that offered forgivable federal loans to help businesses keep their workers employed over the next eight weeks
Within two weeks, the PPP was out of money, and many SMBs that applied were left with nothing to show for their efforts.
Bank of America, Wells Fargo, US Bank, and JP Morgan Chase allegedly did not follow a first come, first served model when administering PPP funds.
Lawsuits notwithstanding, you might just be better off applying with a smaller bank.
According to Crain's New York Business: "Here’s a tip for small businesses looking for a Paycheck Protection Program loan: You’ll probably have better luck applying at a small bank—maybe a really small bank."
"Banks with less than $1 billion in assets processed almost 20% of PPP loans, according to a report this week by Keefe Bruyette & Woods, even though the tiny institutions hold only 6% of the banking system’s total assets." - Aaron Elstein, Senior reporter, Crain's New York Business
According to Duncan Davidson from Bullpen Capital, "The bigger the bank, the worse the application experience." He advises that "you could get approved faster through...SBA-lenders or community banks."
However, you should not apply to multiple banks at the same time. This could compromise your chance for approval.
The demand for PPP funds is sure to remain sky high, so immediate, judicious action is the best way forward.
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