The Small Business Association’s Payroll Protection Program sounds like a good idea. Help businesses keep employees on the payroll during times of financial crisis brought on by things like natural disasters.
But, the process to get the PPP loan, is well, not so clear.
For one thing, when the program was first rolled out in response to the COVID 19 Pandemic, it was not made clear what constituted a full-time employee. Then, the process to get the loan was anything but clear, and further, what was to be expected after an application was submitted was even less clear.
The program was said to take three days to disburse funds. But after a week, many companies had heard no response at all. Others received an approval letter, but still had no cash in hand.
One possible reason for the delays is that for banks who receive only 5% in fees, it makes sense to start with the largest loans and work their way down. That, unfortunately leaves many small businesses waiting.
As a response to the confusion the SBA has created a “streamlined application” that can be completed in less than ten minutes. However, it doesn’t really solve the problem.
Yes, the process takes three days. That, however, is after a 2-3 week review process. Further, a successful application doesn’t equal an approval. What it does denote is only a successful submission which may or may not be approved.
The loan amount requested may also not be what is guaranteed as many applicants have been told that the SBA gets to choose the loan amount based on several factors including number of employees and the type of business.
Like many government processes, the SBA PPP loan process is slow, confusing, and not particularly responsive. Whether it is truly a help or not, however, remains to be seen. The process did only begin on April 3rd and will continue through June 30th, 2020, which mean only time will tell.
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