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A Firsthand Account of a Paycheck Protection Program Loan Application

We provide some background on LendIt's application for the PPP and the thought processes involved

April 14, 2020 By Peter Renton 11 Comments

Views: 893

Like millions of other businesses here at LendIt Fintech we have been impacted dramatically by the coronavirus. We have had to postpone our flagship USA event by almost five months and we have switched to offering digital content. So, while I have been covering the Paycheck Protection Program (PPP) for the industry, I have also been paying close attention to how our own company should navigate this new program.

We have a business banking relationship with a top 10 bank that goes back to our founding back in 2013. When the PPP launched on April 3 they were dragging their feet and provided no guidance that day at all. Also, we were not confident they could handle the massive rush from their many small business customers.

I would have liked to have applied with a fintech lender but when I spoke to several of them right as the PPP was about to launch none were confident they could issue PPP loans in a timely manner. And it was only the middle of last week that fintech lenders could even apply to become part of this program. So, we looked at other options.

Our Denver attorney mentioned that he was getting his PPP loan through a small, local community bank. I connected with a banker there on April 4 (a Saturday), the day after the PPP went live, and by Sunday we had submitted our PPP loan application. They had some follow-up questions on our application that we promptly responded to and by Thursday we had been approved by the bank.

But the most important step comes next, where the bank has to input our data into the SBA E-Tran system. This has been a bottleneck for many banks due to the number of loans trying to get into that system. One fintech leader told me that the volume at E-Tran is somewhere close to 100,000 times their normal volume so there have understandably been some hiccups.

We were informed by our banker that we were in line at E-Trans on Friday morning and by Friday afternoon we were approved with an SBA loan number. That was four days ago and while we have not yet received our money our banker said it should be in our account by the end of the week. Now, we have opened a new business account with this community bank so the money will be deposited there. Hence their motivation to serve new customers like us.

[Update 4/20/20: we received our PPP loan money ten days after being approved.]

Our regular big bank has still been dragging its feet and in fact we have received three emails from them over the last week urging us to apply elsewhere for a PPP loan. So, we are happy we took the initiative here and went with a local community bank. As I said, I would have liked to have applied for this loan through a fintech lender but we couldn’t risk waiting for one of them to be approved.

With Congress still squabbling about how to increase the amount of funding to the PPP and concerns that the initial $349 billion will run out as soon as this week it has been important to move quickly.

Now, none of us know what the future holds but, like millions of other small businesses, this money will help us weather the next few months until the economy can be safely reopened, and we can return to a new normal.

Filed Under: Fintech Tagged With: community banks, Paycheck Protection Program, SBA, small business lending

Views: 893

Comments

  1. jer ayles says

    April 14, 2020 at 6:45 pm

    You did not apply as a lender, correct? I have a multitude of balance sheet lenders throughout the USA who are being turned away right & left by the banks! Any insight, Peter?

    Jer – Trihouse

    Reply
    • Peter Renton says

      April 14, 2020 at 9:32 pm

      Jer, We are not lenders so we did not apply to be a PPP lender. Banks like Cross River Bank and Celtic Bank work with non-bank lenders so that is who I would try.

      Reply
  2. Samuel Hu says

    April 15, 2020 at 1:31 am

    Thanks for sharing Peter

    Would be happy to discuss what I am seeing trying to help small businesses – its quite eye opening and something that I think gets missed in all of this is the lack of financial literacy amongst small business owners.

    Good luck and hope to catch up in the future.

    Reply
    • Peter Renton says

      April 15, 2020 at 5:39 pm

      That is a really good point Sam. I have not talked about financial literacy for small business owners in all this and it is a critical point. I was just reading yesterday about a small business owner who did not think they could apply for the PPP even though they have been affected.

      Thanks for pointing this out, it is something we should all keep in mind when addressing today’s challenges.

      Reply
  3. Jer Ayles says

    April 15, 2020 at 9:26 pm

    In the WSJ today:

    Payroll loan program set to run out of money today – WSJ
    Apr. 15, 2020 3:41 PM ET5 Comments
    Talks between the White House and Congress restarted today in hopes of replenishing the loan program that was designed to keep small businesses afloat during the coronavirus pandemic.
    The Paycheck Protection Program, which set aside $349B in forgivable loans, is expected to run out of funds today, the Wall Street Journal reports, citing a person familiar with the fund.
    As of this morning, the SBA had approved ~1.3M applications for a total of more than $289B in loans.
    While both Republicans and Democrats say they want to add $250B to the program, they’ve been quarreling over whether to broaden it.
    Democrats want to increase the size to include funds for hospitals, food assistance, and state and local governments. And Republicans want the bill to remain focused on small businesses and set aside other funding debates until legislation for the next phase of relief is tackled.

    Reply
    • Peter Renton says

      April 18, 2020 at 11:05 am

      It is tragic that Congress has not extended this program already. Their inaction is already causing millions more jobs to be lost. But I will be surprised if there is agreement on new funding by the end of this week.

      Reply
  4. Steve Reich says

    April 29, 2020 at 7:50 pm

    My bank gave me an e Tran number. What exactly does that mean and can I find out where I am in the process ?

    Reply
    • Peter Renton says

      April 29, 2020 at 8:06 pm

      An E-Tran number means you have been approved by the SBA, that is the final approval step. Your lender now has up to 10 days to provide funding to you but it means you will be funded. So, you should contact your lender as to the timetable.

      Reply
      • Steve Reich says

        April 29, 2020 at 8:24 pm

        Thank you very much.

        Reply
        • Steve Reich says

          April 30, 2020 at 6:48 pm

          How do I find out if the number given to me by the bank is an E-Tran number ? Can you tell me how many characters is in it ? If it lists the abbreviation of the state of which the business is in? I was told I have an e Tran number which I have but I have no way to independently verify it

          Reply

Trackbacks

  1. All of the Fintechs Involved in PPP Loans - Lend Academy says:
    April 16, 2020 at 8:03 am

    […] For many who wanted to be among the first to apply, going through a bank was the only option as LendIt Fintech experienced firsthand. As we stand today there are now many fintechs, both lenders and banks involved in the process […]

    Reply

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ABOUT LENDIT FINTECH NEWS

LendIt Fintech News, Powered by Lend Academy, has been bringing you all the news and information about fintech and online lending since 2010 when it was founded by Peter Renton. We not only have the industry’s most active news site, but also the largest investor forum and the first and most popular podcast.

We are a team of fintech enthusiasts who have been covering the industry for many years. With a deep knowledge of online lending, digital banking, blockchain, artificial intelligence and more our team covers the daily news and writes in-depth editorials.

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