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

First, 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 we assisted with, they are the only bank where the borrower did not have to re-input their payroll information from 2019.  All other banks needed 2019 payroll info reloaded. This week: US Bank! Another thing we have noticed is that most banks are only taking Second Draw applications from First Draw borrowers. The SBA is really focusing on reducing the fraud this time around. 

Second, 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 mitigation 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! It’s open to first time borrowers too, so if you missed the window last year, you better get going this year.

Finally, if you get an SBA loan this year, the SBA will make some of the payments for you, up to $9000 per month!