To read the latest on what the US Treasury is doing in regard to the COVID-19 response CARES Act click here.
SBA Payment Protection Program Loans FAQ updated May 13th. Click here.
According to the US Treasury’s web page:
“The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses."
Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.
• If you’re a borrower, more information can be found HERE
• The application for borrowers can be found HERE
4 Ways to Spot an SBA Loan Scam
1. Don't reveal personal financial information.
If you receive any calls, emails, or other communications claiming to be from the Treasury Department or the SBA offering you grants or stimulus payments in exchange for personal financial information, do not respond. And whatever you do, don't provide any private information--especially not social security numbers, credit card details, or banking information.
Scammers could use this information to apply for a loan on your behalf--and you'll be on the hook for paying it back. Also note, you only get one opportunity to apply for a loan, according to Ami Kassar, founder and CEO of MultiFunding, a small-business loan adviser based in Ambler, Pennsylvania.
If you do receive any notices like this, the Treasury Department recommends contacting the FBI.
2. Don't pay a cent.
If someone or some entity says they can get you a loan faster for a fee, don't buy it. Loans under the new CARES Act are set up so that business owners will not have to pay any kind of related fees--this includes application fees, package fees, and closing fees, says Kassar.
3. Don't work with unknown lenders.
While lenders don't have to be on the SBA's preferred lender's list to process these loans, they do have to apply for preferred status before granting your loan, and there's no telling how long that will take, says Kassar.
"It's best to go through a federally backed credit union" or traditional SBA lender, as they'll be the most familiar with the program and as such get up to speed on new processes sooner, he advises. What's better? Going through a bank with whom you already have a relationship, says Kassar. That familiarity with your company might make the lending process easier.
4. Don't buy into fast money promises.
If a company or person is telling you they can get you an SBA loan under the new PPP in a matter of hours, steer clear. Lenders are still waiting on guidance for how to process these loans. The application is expected to be available starting April 3.
If a company offers you a quick advance that's unrelated to the new PPP or any other stimulus package, you should also be leery, as you may run into rapid repayment terms at exorbitant interest rates, says Kassar.
"If you have some hundreds or thousands of dollars a day deducted from your bank account for a quick repayment of a loan you took out, this could create a worse situation for you then you're in now," notes Kassar.
If you do need money fast, the best thing to do, suggests Kassar, is head to your current lender and request a bridge loan, which can later be refinanced into a PPP loan. You can also apply for an Economic Injury Disaster Loan (EIDL) of $10,000 that will not need to be repaid.