EIDLing the Engine: Don’t Call Us, We’ll Call You

First the Subject line.  With a new administration and congress, there are going to be a LOT of changes to rules and policies that affect your business, so my focus will be to keep you updated with the relevant items and try not to take more than a few minutes of your time each week.  So watch for the Russell Report every Monday and, as always, if you want to be off the email list, just email me and I’ll take you off.

Second, PPP First and Second Draws are off to a good start and overall, much smoother than last year.  The Big Bank Winner this week is Bank of America!  Honestly, it’s a bit of a surprise, but of the seven loans I assisted with, they are the only one where the borrower did not have to re-input their payroll information from 2019.  Chase needed 2019 payroll info reloaded and we haven’t heard back from Union Bank and all the other banks wanted previous payroll information as well.  We are going to try US Bank this week.  I wouldn’t even bother with The Loan Source – they haven’t figured out the forgiveness part yet so they have no business handing out new money.  Most banks are only taking applications from their own customers.

Third, the big news for small businesses was that EIDL was kept in idle.  In short, unless you are in a low-income community and can demonstrate a 30% drop in revenue and applied last year, never mind.  Really.  Unless you applied for the EIDL Advance last year, you are NOT eligible.  Well, the good news is that if you meet the criteria and received less than $10,000, the SBA will contact YOU to advance the balance you are eligible for.  Same if you applied and did not get the Advance.

Surprises:  Two lenders (not banks) have stated that before they will do the Second Draw, the First Draw must be forgiven.  Nowhere in the interim final rule (IFR) for PPP does it even hint at that, so that must be a fraud mitigant step that SBA is suggesting to lenders that are taking Second Draw requests when the First Draw was done elsewhere.  Secondly, there is a report of one lender reducing the second draw to $30,000/employee.  This is also not in the IFR but the “guidance” can be found in a super-secret link that the SBA uses to chat with Lenders.

Keep your PPP applications going and don’t forget, if you get an SBA loan this year, the SBA will make some of the payments for you, up to $9000 per month!