Some small businesses hoping for emergency relief can expect a chaotic start to their Friday.
The Paycheck Protection Program, which promises $350 billion to small businesses affected by the coronavirus pandemic, is supposed to begin today, with a loan application form already live on the U.S. Treasury’s website. Eligible businesses can apply for loans of up to $10 million and may not have to pay it back if the money is used to maintain payroll or other qualifying expenses.
The loans are administered by the Small Business Administration, and businesses can even search for nearby eligible lenders on the SBA’s website.
But some major banks have warned that they won’t be immediately ready to participate. “Financial institutions like ours are still awaiting guidance from the SBA and the U.S. Treasury,” JPMorgan Chase said in a message on its website this week. “As a result, Chase will most likely not be able to start accepting applications on Friday, April 3rd, as we had hoped.”
Chase goes on to say it will alert customers via email and on social media once the program is available.
According to NBC News, some banks received official guidance from the Treasury on Thursday, just hours before the launch.
Inc magazine, our sister publication, is holding a town hall event today (Friday, April 3) at noon ET where experts will “weigh in on updates to the stimulus package, changes to unemployment insurance, and other urgent topics small businesses.” You can learn more and sign up here.
What else you need to know about PPP
The Paycheck Protection Program, part of the massive $2 trillion economic stimulus package signed into law last week, is meant to provide an economic lifeline for an estimated 30 million small businesses affected by COVID-19.
- The details: The Small Business Administration has a dedicated page where you can learn about loan eligibility and forgiveness details. Find it here.
- Where to apply? Find the borrower application form here or here.
- Where to find a lender? The SBA has a searchable tool for that here.
- What if I’m a lender? The final rule will be posted in the Federal Register. You can find an interim version of it here.
Are banks ready?
Here’s how some of the major financial institutions are responding to questions about the Paycheck Protection Program:
- Chase Bank (as noted above) says it doesn’t expect to be ready to participate by Friday, April 3, but will notify customers when it is. More info here.
- Citi had this message on its website as of Friday: “The Small Business Administration (SBA) is currently developing regulations and guidelines for this program. When received, Citi and other Lenders will be able to originate these loans and help clients with specific questions.” More info here.
- Bank of America: If you have an existing borrower relationship, BoA says you can apply online. More info here.
- Wells Fargo says, “As soon as we can start accepting applications, we’ll add the link to the online application, so check back often. Please note, if you apply through Wells Fargo, you will only be able to apply online, not by phone or in a branch.” More info here.
- Capital One says, “We are currently testing our systems with a small number of applications . . . We received guidance from the Treasury Department late on Thursday evening, April 2, and we are currently ensuring that our application process is fully functional and compliant. We are working quickly to finalize our digital application process, and hope to begin accepting applications through that channel as soon as possible. We ask that you wait for that process to be up and running before submitting your application.” More info here.
This story has been updated with responses from some banks.