Today, April 3, 2020, was the first day that small businesses and sole proprietorships were authorized to apply for and receive loans under the Paycheck Protection Program (PPP) to cover payroll and other business-related costs incurred from February 15, 2020 through June 30, 2020. Independent contractors and self-employed individuals were expected to be able to apply and receive these loans on April 10, 2020.
Lending institutions were expected to meet the short deadline given by the U.S. Treasury and the Small Business Administration and consequentially fell short. Yesterday evening, lending institutions such as Fifth Third Bank and Chase notified the Treasury that they would not be ready to begin processing PPP applications until next week.
Fifth Third Bank released the following statement in response to the decision not to launch their platforms for PPP Loans:
It’s critically important to us at Fifth Third Bank, that we do not roll out a platform whereby the borrower completes the application only to either have to re-apply later and/or that application sits in a stagnant queue due to the lack of process guidance from the SBA for this particular program.
We feel it would be inappropriate to launch without the necessary information that our customers need to provide in addition to what the bank needs to process these specific loan applications.
Most, if not all, of our peer banks will join us in delaying their programs tomorrow due to the same reasons I mentioned above. I predict there will be a lot of misinformation in the coming day or two, but rest assured the clients of America’s largest banking institutions will have full and appropriate access to these funds.
[No Small-Business Relief Yet: False Start On Paycheck Protection Program Loans, Apr. 3, 2020, https://www.forbes.com/sites/brianthompson1/2020/04/03/no-small-business-relief-yet-false-start-on-paycheck-protection-program-loans/#2c2eab8f34c4.]
There are some lending institutions that have expected to meet the deadline imposed by the U.S. Treasury Department and the Small Business Administration (SBA). Bank of America has been reported to become the first major bank to open its online portal. However, they are only allowing applications from customers with a “pre-existing business lending and business deposit relationship with Bank of America, as of February 15, 2020.”
There also have been revisions by the SBA to the PPP loan terms. One of these revisions was a change of the interest loan from .5% to 1% in response to feedback that the term could prevent community banks from participating in the program. The interim final rule, which provides additional implementation guidelines and requirements for the PPP program, is located here.
The PPP loan program is still on a first-come, first-served basis; therefore it is imperative that eligible applicants complete the form provided by the Treasury Department and await instruction from lending institutions on whether they will be releasing their own forms.
Below is the Paycheck Protection Program Loan application and corresponding Information Materials provided by the U.S. Treasury Department:
Paycheck Protection Program Loan Application released by the Treasury Department can be found here.
Payment Protection Program (PPP) Information Sheet for Borrowers can be found here.
Our attorneys are ready to assist you in handling all business needs during this unprecedented time of rehabilitation. During prior emergencies, Laddey, Clark & Ryan’s attorneys have assisted our business clients in applying for and securing financial assistance through the United States Small Business Administration. Please feel free to review the provided Payment Protection Program Loan Application and Payment Protection Program Information Sheet. If you need any further assistance, please contact the Business Law Practice Group at Laddey, Clark & Ryan, LLP:
- Angelo J. Bolcato, Esq. (firstname.lastname@example.org)
- Jonathan N. Frodella, Esq. (email@example.com)
- Thomas N. Ryan, Esq. (firstname.lastname@example.org)
- Richard T. Sweeney, Esq. (email@example.com)
Our attorneys can also be reached at: 973-729-1880
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