If You Need To Apply
- · If you have not applied then you need to apply as soon as possible. Today is better than tomorrow. Tomorrow might get you the funds. But if you wait until the day after, the funds will possibly be gone again by the time the lender processes your application.
- · Where to get money?
- · Check your local credit unions and smaller regional banks first, these institutions had the most success lending to small businesses.
- · Ask who has had their loan approved and at which bank. Contact those banks. Ask your business owner friends, post on Facebook, ask family.
- · You can search for banks that are accepting applications here.
- · You can also try Lendio which I’ve had clients already receive approval (I have no affiliation and this is not a referral link)
- · You can also try Kabbage (I have no affiliation and this is not a referral link)
- · What do you need?
- · Everything. No seriously. Get it ALL ready. I’m a CPA who does this for a living it took me about 1 hour to apply with Chase who required significantly less documentation and it took me about 90 minutes with the regional bank who needed more documentation. You should at least double your time commitment.
- · First and foremost, you’ll definitely need your payroll records to calculate your average monthly payroll. You can use our template available here at this blog post.
- · Here’s the list of documents I submitted to my 2nd lender after Chase fucked me and tens of thousands of other applicants by prioritizing big corporations:
- · Completed Loan calculation. You can use our template here at this blog post and should have your calculations ready but you may also need to submit on the banks own form.
- · The SBA application itself fully completed and signed (make sure an addendum is completed for additional owners).
- · Payroll documentation. Including but not limited to:
- · 2019 Q1, Q2, Q3 and Q4 941 Payroll Tax Filings
- · 2020 Q1 941 Payroll Tax Filing
- · 2019 940
- · 2019 W2s
- · 2019 W3
- · 2019 Quarterly State Unemployment Reports
- · Payroll summary/ledger report from the payroll system.
- · Signed copy of the company’s Operating Agreement
- · IRS Form SS-4 / EIN
- · Certificate of Good Standing from your state’s secretary of state website
- · Articles of Organization/Incorporation. I got mine on www.eforms.com (I have no affiliation and this is not a referral link)
- · Beneficial Owners – Borrowers Certification Form (my bank provided me with their own form that required social security numbers, dates of birth and drivers licenses of all owners).
- · W9
- · For each individual owner, I had to provide at least two forms of identification listed below, one of which must be “primary” identification:
- · Primary Identification
- · An unexpired, valid state driver’s license or Department of Public Safety ID Card
- · An unexpired, valid out of state picture driver’s license
- · An unexpired, valid U.S. military identification card
- · An unexpired, valid picture passport
- · An unexpired, U.S. Alien Registration Card
- · Firearms license, with a photograph
- · Secondary Identification
- · Firearms license, without a photograph
- · Insurance card
- · Credit card (do not make a copy- complete the bank’s internal form)
- · Social Security Card (do not make a copy)
- · Utility bill
- · Property tax bill
- · Voter Registration Card
If You Have Applied and No Response
You need to find out where your application is in processing. Did they even look at your application or do they need a nudge? Do they need additional documentation or clarification? This is likely the case in most instances I’ve seen. Maybe you’ll find out it’s further along. That would be cool, but don’t hold your breath.
· What you need to do in order of preference:
- · If you have a contact person at the bank, message them. Be polite but firm to inquire about the status of your application. Provide your full legal business name, EIN, and application confirmation number if you have one.
- · If you don’t have a contact person, call the bank and ask for someone who can help. Fair warning – you may be on hold for a very long time and need to call back several times. Be patient but persistent.
- · Elevate to a supervisor or bank VP. Leave a voicemail if asked, but also ask for their email and send a polite email inquiring about the status and next steps.
- · Start finding other banks, see steps above in Have Not Applied. This is what I did, I moved onto a regional bank after Chase fucked me and tens of thousands of business owners over in favor of big corporations. My application is still in with Chase, but I’ve moved onto and have a backup option in place. I’d recommend this for anyone but especially those who bank with the big banks.
If You Have Applied and Lender Needs More Information
If you applied, this is most likely where your application is. But do you know what they need from you? If not, see Applied and No Response Above. If you know exactly what the bank needs read on…
- · Get back to your lender as soon as humanly possible. Like, get off your butt, NOW! Not this afternoon, not in an hour. Cancel your next Zoom meeting, get your spouse to watch the kids, and stop reading this article because time is of the essence.
- · As an example, after I applied at my backup bank my application wasn’t yet accepted. I gave the banker my cell phone number and my wife’s cell phone number to call if they had any questions at all. I told my wife, “if the lender calls I don’t care if I’m sleeping, in a client meeting or on the toilet. Come get me immediately.” Every moment you delay someone else gets in line ahead of you.
- · Get the lender anything they ask for no matter how absurd. I’ve been asked for it all, see the list above in Need To Apply. Don’t give them a hard time, just do whatever they ask.
- · Example: I am a family-owned business. I don’t have a ‘signed operating agreement’ as requested. I googled “operating agreement”, paid $7.99 to www.eforms.com and 20 minutes after filling out my best guesses on their form I had an operating agreement. If you need help, ask your accountant, CPA, attorney, financially savvy friend or an engineer or scientist in your life (they are always figuring stuff out).
- · Is the lender giving you the run around? Hard to say because lending always gives applicants a hard time. That’s their job. But do they sincerely need something and you don’t have it? Ask nicely if they will accept something in lieu of.
- · Example: We had a client asked for their IRS EIN letter (often called an SS4 or CP 157). The client cannot find this letter and hasn’t been able to find it for years. The only way to get this letter is to call the IRS and guess what? Yup, the IRS phone lines are closed down and it’s literally impossible to get this form right now. This client should contact his attorney and other accountants from 10 years ago. In the meantime, we’ve instructed the client to submit several tax filings and other government notices that prove his EIN. We’re still waiting to see if the lender will accept this evidence.
If You Are Approved but No SBA Number
- · Phew…. You made it most of the way through the lending process. This is a really great position to be in. My Chase representative told me 20,000 applications are in this position at Chase. That’s 20,000 applications approved by Chase Bank alone and but waiting to be submitted to the SBA. Now, am I number 157 or number 19,157? There’s no way to know but you’re sitting pretty good if your at this stage. Especially at a smaller community or regional bank.
- · I’m not a gambling man, but I’d say your chance of getting PPP money are pretty good if you’re here. If you wanted to hedge your bet, you could apply at a backup back as I have done. If you don’t get funded, you can file your complaints here. Be sure to give them hell!
If You Are Bank and SBA Approved but No Funds
Hell yes! Your funds are incoming (as long as there are no unforeseen hitches). I have a few clients in this position. Everything is approved and they have an SBA approval number. This is key – if you have an SBA funding number, it’s legit. If you don’t have one, sorry – you’re in the step before this.
- · If you have an SBA funding number be patient, you are supposed to get funds within 10 days of approval. There’s lots more work to be done but you made it through this hurdle. Congratulations!
- · We recommend holding off on running any pending or potential payrolls until PPP funds are received in your account so that the pending payroll counts towards your PPP forgiveness calculations.
If You Are Approved and Funds Have Arrived
Double hell yes! You’ve won the battle but the war is far from won. Just sit back for a minute and take a deep ujjayi breath. You did something only 4% of applicants were able to do (as of April 21, 2020).
Short and sweet, our recommendations are:
- · Only pay workers who are currently working and essential.
- · Do NOT bring back staff until you and your accountant have done PPP forgiveness and Cash Flow projections. Does your accountant do those? If not, it maybe time to work with The Fitness CPA.
- · Guidance on PPP forgiveness is not currently available as of April 21, 2020 so no one knows exactly how forgiveness will be calculated. For that reason we are asking you, and all of our clients, to hold off spending PPP funds outside of paying workers who are already working and essential. We know it’s painful to have come all this way and be told to wait but guidance is coming any day now. We’ll update you here when it’s available. The hope is that it arrives before the end of April but it’s the IRS, so don’t hold your breath.
- · If you must use the funds (and we already told you not to 3x now) absolutely do not spend more than 25% of the funds on anything other than payroll wages or you could screw the whole thing up.
Ask a Direct Question
We hope this has helped to answer some of your questions. If you still have specific questions you’d like answered, we invite you to submit them here.
In the meantime, check out our COVID-19 Resource Hub where we’ve compiled our latest blog posts & YouTube videos along with third-party resources that we find valuable. There is some great stuff in there.