• Matt Wansley - MCA Staff

Congress Readies More PPP Funding For Small Businesses. Here’s What You Need To Know.

What is the difference between a PLP number and an SBA number?

"PLP," which stands for "Preferred Lending Program," is a designation given to a lender that means it can approve loans instead of the SBA. SBA numbers are for loans not done through a PLP. For many banks, receiving a loan approval number of either designation means the bank has secured its portion of the funding through the PPP. Getting that number does not automatically come with the money, which takes time. If Congress authorizes new PPP funding, do I need to reapply for a loan under the program if I already had an application underway, but still not yet approved?

No. Your lender most likely retained your information, so you need not resubmit it. Many have continued to process loan applications to ready them in the hopes of the program receiving new funding. That said, it is probably best to double-check with your lender of choice. If I applied at one bank but far back in the queue, should I apply at another as well?

It seems small businesses have two options, given one fact: Only one loan application per business can be authorized through the SBA's electronic system, E-Tran. After that, any other applications en route that use the same employer identification number, even from different banks, will essentially bounce back. Find and stick with one trustworthy bank, rather than putting out multiple applications that tax various lenders' time and ultimately must be revoked after one wins approval. The other option is for small businesses to apply through multiple lenders and once they score an approval, cancel the other applications or wait for them to bounce back. Communication is key and, if a borrower’s current lender feels they are unable to process their application before funds are exhausted, it may be advisable to seek other resources. I got approved! How long does it typically take between approval and when I see the money?

The lender has up to 10 calendar days to start disbursing the money. About a week is a good rule of thumb. Lenders may choose to disburse the entire amount all at once or in portions over the course of the loan period. Got Your PPP Check? Congrats, Now Get Ready For Intense Federal Scrutiny On April 21, standing right beside President Donald Trump, Treasury Secretary Steve Mnuchin started detailing the government's additional plan to shore up the finances of small businesses. Congress will pour another $320 billion into the wildly popular Paycheck Protection Program after about 1.7 million businesses exhausted the $349 billion in the first traunch. Mnuchin wanted to focus on the fact that the government is there to help small businesses. But the reporters at the White House coronavirus briefing pressed Mnuchin on how exactly the large publicly traded companies qualify for the loans. A Wall Street Journal analysis just days ago concluded dozens of publicly traded companies received these PPP forgivable loans totaling more than $380 million. While it's agreed that $380 million only accounts for about 1 percent of the first phase of the program, still, when the average loan amount per business is $206,000, that number is enormous. To counter the argument from the press that the government may not have thought through this program and hastily introduced it to curb the unemployment lines, Mnuchin said something that should caution every business that has already received the PPP money. "I just want to clarify, because certain people on the PPP may have not been clear in understanding the certification," Mnuchin said, referring to small businesses that may ask for forgiveness of these loans. "If you pay back the loan right away, you won’t have liability to the SBA and to Treasury. But there are severe consequences for people who don’t attest properly to a certification." There you go! Businesses who have received the PPP can expect a new federal agency going over their numbers when time comes for these entities to ask for forgiveness of these loans. While certifications were an important element of the whole program, it did not become a central point of argument to justify the usage of more than $650 billion – Why? Because large restaurant chains such as Shake Shack (NYSE: SHAK), Ruth's Chris Steakhouse, Potbelly Corp. (Nasdaq: PBPB), Taco Cabana and many others got PPP money. Mnuchin and his team at the Treasury and the program administrator, the Small Business Administration, will likely embark on an intense certification process for small businesses asking for their loans to be forgiven. In essence, there will be a new federal auditor beside the Internal Revenue Service: the SBA. And here we are talking about PPP and $660 billion-plus in newly printed money. How will the feds make sure there's a return on investment to this thing? Initially, I suppose they would look at the unemployment claim numbers across states. If they start going down, one could argue businesses are hiring the workers back because of the PPP money. But what happens if these jobless numbers don't change much? That's when every business that received PPP should start worrying about the certification process. Or they can forget about the forgiveness and treat the money as a 1 percent loan to be paid over 30 months. That's not that bad either, frankly.

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