Now that the Coronavirus Relief Bill has been passed and signed, the news is rife with “analysis” and commentary and prognostication which is leading to the raising of expectations on the part of potential borrowers. However, as of today we still do not have the necessary guidance from the Treasury and SBA for these programs to be put into motion. The language of the bill gives them ten days to develop the necessary policies and procedures governing new PPP loans, modifications to the forgiveness process and EIDL program (including the re-opening of the “first advance”). Given what is understood at this time concerning some of the shifts in the focus for these programs, changes in the guidance are anticipated to be significant.
Also keep in mind that once this guidance is received, lending institutions will then review and decide on whether they will participate, and if so, what unique requirements they may impose. Already there are articles appearing in the press stating that some lending institutions are suffering from PPP fatigue and may decide to opt out participating. We will be re-polling financial institutions in our market to see if they will or will not participate and, if they do decide to do so, under what conditions. It is recommended that the network may want to contact lenders in their markets to determine their interest in participating in PPP2.
In a related issue concerning the amount of fraud apparent in the first rounds of PPP funding and the EIDL program, here is a link to an article published in Entrepreneur, which is a cautionary tale of what happens when a borrower tried to defraud the system following 9/11.
Right now, the bottom line message is to stand fast and wait for guidance from both DC and local lenders. Please reassure them that once any relevant and actionable information is received we will immediately pass it along.