Coronavirus small business loans: Lenders prepare for surge of affected applicants
One lender has a queue of more than 7,500 businesses, before it has even begun accepting applications
Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.
Applications for the Paycheck Protection Program, a lending program established as part of the government’s multi-trillion stimulus package, is set to begin accepting applications on Friday, and lenders are preparing for a surge of activity.
The Paycheck Protection Program, or PPP, falls under the Small Business Administration’s purview. It is designed to incentivize companies with fewer than 500 employees to retain staff despite difficult economic conditions that have resulted from the coronavirus pandemic. Applicants can receive up to $10 million, which can be forgiven in certain cases.
CORONAVIRUS STIMULUS CHECKS: WHO GETS MONEY AND WHEN?
Loans will be administered through existing SBA 7(a) lenders or federally insured institutions participating in the program.
Chris Hurn, CEO and founder of Florida-based Fountainhead, which is an existing SBA lender, is preparing for an influx of applicants. Hurns has a queue of more than 7,500 businesses, he told FOX Business. That is more applicants than his business sees in a three- to four-year timeframe.
“We pivoted the whole business to PPP essentially,” Hurn said. “This is our key responsibility.”
NEED CORONAVIRUS CASH RELIEF NOW? HOW YOUR 401(K) CAN HELP
Overall, Hurn expects to service tens of thousands of small businesses.
“Nobody alive today has ever seen anything like this,” he said. “We’ll be working through that backlog 24/7.”
PPP is expected to move cash more quickly than the SBA’s other programs, for faster economic relief. Treasury Secretary Steven Mnuchin has even said businesses will be able to get a loan the same day as a result of a pared-down regulatory process.
However, Hurn said business owners may not want to have high expectations about being able to get money that quickly.
“It’s a little unrealistic, based on what I know right now, to think it will be approved and funded in the same day,” Hurn said, adding that while he would “love” for that to be the case, timing will ultimately depend on how much friction lenders receive throughout the regulatory process.
He also said he would be surprised if any loans are made on Friday.
CLICK HERE TO READ MORE ON FOX BUSINESS
The application is “relatively straightforward,” Hurn said, adding that he expects there could be more streamlined iterations released in the future.
Here’s a look at the information you will need in order to apply.
In a nod to the Trump administration and lawmakers, Hurn said he has never seen legislation move faster out of Washington.
In addition to PPP, small business owners can apply for relief through the SBA’s economic injury disaster loan program. Sometimes both programs can be an option.
Here’s a look at the difference between the two SBA offerings.