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Message
re: Didn’t get PPP, what now?
Posted on 4/16/20 at 3:57 pm to VABuckeye
Posted on 4/16/20 at 3:57 pm to VABuckeye
Just got off the phone with my office manager. She is currrently managing another company while we wait for my contract to start.
She is with a local bank now that hasn't recieved any updates since applying.
IMO, everyone needs to find a banker that will respond to you as well as WORK for you.
ETA: I pushed for updates daily, sometimes twice a day for the last 2 weeks. I also did a lot of research and talked to people like VA to find out what other people are seeing and find the best option for me.
She is with a local bank now that hasn't recieved any updates since applying.
IMO, everyone needs to find a banker that will respond to you as well as WORK for you.
ETA: I pushed for updates daily, sometimes twice a day for the last 2 weeks. I also did a lot of research and talked to people like VA to find out what other people are seeing and find the best option for me.
This post was edited on 4/16/20 at 3:59 pm
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Posted on 4/16/20 at 4:03 pm to baldona
They need four times what was originally approved. Maybe more. By the time they figure out the process most small businesses that don't have Bankers, Lawyers and CPAs on retainer will be out of business.
Posted on 4/16/20 at 4:05 pm to The Spleen
We’ll do $15mm in revenue this yr and have 32 employees in total between salary and hourly folks. Our process with Synovous over here in ATL was pretty great. Our banker was telling us what a nightmare they were experiencing with companies just sending them all kinds of information that was irrelevant to the application process. I can only imagine. Luckily, we have a strong controller who did a great job pulling everything together. It absolutely helped us but we’re also lucky our bank seemingly had its stuff together. I’ve been frustrated with them for a while due to a real estate purchase they drug out but now I’m glad we waited to flip our business. Will probably just initiate a new relationship for real estate deals and keep our business banking with Synovous. Having multiple relationships is a good thing and will help us use them as a tool.
Posted on 4/16/20 at 4:13 pm to BLM
You’re right. Proper documentation was key. Banks didn’t have time to back and forth with people who couldn’t read or get their documentation together. I know this didn’t apply to everyone but it did for many businesses.
Posted on 4/16/20 at 4:13 pm to cgrand
There will be no more funding. Nancy has made that clear. She would rather those employees file for unemployment.
Posted on 4/16/20 at 4:54 pm to baldona
Take a look at the Employee Retention Credit.
LINK
This is a decent overview.
Essentially, it will give you a 50% tax credit on wages paid up to 10K per employee, per year. You access the credit by reducing your employment tax deposits, or if that's not enough, getting an advance by fling a new Form 7200 via fax.
You can also defer the employer share of FICA until 2021/2022.
Neither of the above (ERC or deferral of employer share of FICA) are available if you take PPP, so, it hasn't gotten as much publicity. But it's out there. I don't know if it will help you or not.
Good luck.
LINK
This is a decent overview.
Essentially, it will give you a 50% tax credit on wages paid up to 10K per employee, per year. You access the credit by reducing your employment tax deposits, or if that's not enough, getting an advance by fling a new Form 7200 via fax.
You can also defer the employer share of FICA until 2021/2022.
Neither of the above (ERC or deferral of employer share of FICA) are available if you take PPP, so, it hasn't gotten as much publicity. But it's out there. I don't know if it will help you or not.
Good luck.
Posted on 4/16/20 at 7:26 pm to NOSHAU
quote:
I went through Regions as well and submitted 1st day. Apparently did not get in either (although I cannot get a definite answer from our relationship manager).
I’d be curious to see who they get approved and when they applied compared to others. Fair lending violations like this all over the place.
Posted on 4/16/20 at 7:51 pm to AndyJ
A lot of the bigger banks and larger regional banks went the extra mile to ensure proper loan calculations on the front end in an effort to prevent issues at loan forgiveness time and rightfully so. The sba will find any reason not to pay. A lot of the smaller community banks turned in applications and got funding really fast, but I suspect there will be a lot of upset clients when they are applying for loan forgiveness and they find out they owe a lot of money because their loans were overstated.
Posted on 4/16/20 at 8:04 pm to Rum Ham
Your are probably right because I had a banker tell me this. I told him it was stupid and he had no answer. Let’s assume I make a mistake and calculate my ppp loan at 1,000,000 when it should be 900,000. I got 900k for free. Am I really going to complain about not getting a million for free? Plus bank has very little risk because most applicants are credit worthy and still can pay whatever small percentage may have been miscalculated.
Posted on 4/16/20 at 8:26 pm to WildBillJR
quote:
Let’s assume I make a mistake and calculate my ppp loan at 1,000,000 when it should be 900,000. I got 900k for free. Am I really going to complain about not getting a million for free? Plus bank has very little risk because most applicants are credit worthy and still can pay whatever small percentage may have been miscalculated.
Exactly. The risk I’ve seen on the banks side is backed by the SBA. As long as numbers were not completely absurd, there should have been absolutely no reason not to back the loan and rubber stamp them through.
I have 3 employees and I only used the salary for 2 for my loan because that was the “Avg” for the last year. Pretty sure I could have easily added the 3rd as I’m a small growing business. My PPP loan was about 15% of the amount I currently have in my bank account with them. Absolutely 0 reason not to rubber stamp mine. Hell they see my monthly statements.
Furthermore, I never heard a peep back that something was wrong or missing. I’ve been a customer for 7 years with them.
Posted on 4/16/20 at 8:36 pm to WildBillJR
think from the bank POV.
Best case, it takes them 2 years to collect 100k and for tying up their capital they earn 1% plus maybe a servicing fee. That’s a poor capital allocation decision.
Now could they sell the loan? Who is buying a 1% loan with no collateral?
There was talk of the Fed buying these loans, is that still happening??
If the loan turns tits up, how much of a hassle will it be to collect on the guarantee? Will the underwriting be challenged? How many months until it pays off??
It’s low risk for bank but it’s not no risk...
Best case, it takes them 2 years to collect 100k and for tying up their capital they earn 1% plus maybe a servicing fee. That’s a poor capital allocation decision.
Now could they sell the loan? Who is buying a 1% loan with no collateral?
There was talk of the Fed buying these loans, is that still happening??
If the loan turns tits up, how much of a hassle will it be to collect on the guarantee? Will the underwriting be challenged? How many months until it pays off??
It’s low risk for bank but it’s not no risk...
Posted on 4/16/20 at 8:43 pm to LSUFanHouston
Banks should be happy they are able to write anything during this whole ordeal.
Also, this was about getting cash to small businesses, not the banks making their nut for the year.
Also, this was about getting cash to small businesses, not the banks making their nut for the year.
Posted on 4/16/20 at 8:44 pm to LSUFanHouston
quote:
100k and for tying up their capital they earn 1% plus maybe a servicing fee. That’s a poor capital allocation decision.
The banks were just the underwriters they were getting the money immediately from the SBA, it’s not their capital tied up right? Pretty sure.
Also on $100k they got 3%.
How much work was required for that $3000? SBA backed these, with the proper precautions theres no reason they shouldn’t have absolutely cleaned up financially here.
Eta: furthermore, what else were the banks working on right now? Mortgages and vehicle loans? I mean 10 days ago it was possible we’d be not working through the summer. Banks should have been damn happy to work tons of overtime to get their money when they could.
This post was edited on 4/16/20 at 8:46 pm
Posted on 4/16/20 at 8:48 pm to baldona
Your calculation is wrong. They got 3% on the $1M loan. That’s $30000 just to make the loan and then they get another 1% on whatever doesn’t get forgiven. The $30000 is an upfront origination fee.
Remember. He was talking about a $1M loan where $100k didn’t get forgiven. The bank has to carry that $100k for two years and it’s SBA guaranteed in case of default.
Remember. He was talking about a $1M loan where $100k didn’t get forgiven. The bank has to carry that $100k for two years and it’s SBA guaranteed in case of default.
This post was edited on 4/16/20 at 8:54 pm
Posted on 4/16/20 at 8:52 pm to baldona
quote:
Furthermore, I never heard a peep back that something was wrong or missing. I’ve been a customer for 7 years with them.
You never heard a peep back because they never got to your loan.
Posted on 4/16/20 at 8:54 pm to VABuckeye
quote:
Your calculation is wrong. They got 3% on the $1M loan. That’s $30000 just to make the loan and then they get another 1% on whatever doesn’t get forgiven. The $30000 is an upfront origination fee.
Yes correct. I misunderstood lsufanhouston, I didn’t realize he was using the above scenario of $1mm PPP.
If that was such a major concern, the banks could have been upfront and required low ball requests. To my knowledge, none did right? I specifically lowballed myself for this very reason to prevent additional paperwork to prove. I wanted less money faster and more guaranteed.
But even so, on that $1mm loan they also made 3% up front. So if they overloaned by 100,000 they really only tied up $70,000 of their capital.
Again also, what else were the banks working on here? The economy is shite. Outside of the fact it was a major business move to help out their customers. How much money were they actually tying up that would be used for something else right now?
Posted on 4/16/20 at 9:03 pm to baldona
It’s a rubber stamp loan. Literally. The big banks fricked up and overthought it. I know that I for one am looking for a relationship banker pronto.
I’m glad you didn’t need the loan but at the same time I’m sad that you are laying off people as a result of this. I believe that’s what I read.
I’m glad you didn’t need the loan but at the same time I’m sad that you are laying off people as a result of this. I believe that’s what I read.
Posted on 4/16/20 at 9:11 pm to LSUFanHouston
I see your point but I didn’t tell you rest of story. We have revolving line of credit much bigger than ppp loan and banker sees cash flow plenty enough to cover loan and then some. In my experience big bankers always talk about these theoretical risk that aren’t there in reality when you actually look at situation. Smaller banks/bankers are less bureaucratic and do things that make sense. At least that’s my experience.
Posted on 4/16/20 at 9:19 pm to WildBillJR
Wife’s company didn’t get anything and she’s being furloughed either next week or the week after. She actually volunteered for furlough since we’re in a better financial situation than a lot of her employees and co-workers. Her CFO applied the first day and responded promptly to the 2 requests for more info. Seems fishy.
Posted on 4/16/20 at 9:21 pm to WildBillJR
Been a customer at Regions for 11 years, they failed me.
Has anyone had any experience with Hancock Whitney? I also have an account with them.
Has anyone had any experience with Hancock Whitney? I also have an account with them.
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