Today Senator Mitch McConnell called for $200 billion more in resources for SBA-administered Paycheck Protection Program (“PPP”). PPP provides fully-guaranteed non-recourse loans to small businesses with 500 or fewer employees. A significant portion of the loans may be forgiven if borrowers maintain payroll. The PPP program is very broadly written and excludes the SBA’s normal gross revenue eligibility requirements allowing wealthier small firms to participate.  PPP is on a first come first serve basis without strong criteria for whether applicants have suffered in the current environment.

However, PPP currently lacks clear guidance because the SBA appears to be overwhelmed. That has made many banks reluctant to ramp up for the disbursement of loans under the program. Some banks are hesitant to engage the program at all, while others are only processing applications from existing customers with whom they are more confident in underwriting.

This is bad news for many small businesses since they typically have less than 30 days of liquidity and don’t have the resources to make it very long while shutdown.

Is your business experiencing difficulty accessing a PPP or EIDL loan?  Let us know about your experience.