Payroll Protection Program Problems – Application Not Processed
As part of the stimulus passed in the United States, the federal government enacted the Paycheck Protection Program or PPP. This program was/is designed to cover the payroll of small and medium size businesses up to 500 employees for the next couple of months. With $349 Billion in funding it seemed like PPP would be a great support for small businesses across the nation, however that doesn’t seem to be the case for many. PPP is now out of money and business owners across the country are in trouble.
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I Applied for PPP at BofA & Chase
I have two small businesses which both applied for PPP within the first day the program was available. One of my businesses banks with Chase and the other with Bank of America. I decided to use those giant lenders for my PPP applications figuring that they had most of my information and it would just be “easier”. I was so wrong!
My story isn’t unique. I have heard from many other small business owners who have been shafted by the big banks (well beyond Chase & BofA) when it comes to PPP. I applied for the program within the first day applications went live. All I received was an automated confirmation of my application and a message to wait to be contacted. I’m still waiting, but not holding my breath. 🙂
And that’s because the money has run out. The $349 Billion went so quickly that Congress is now considering passing another $250 Billion in funding. I HIGHLY doubt that will last long either. Even if more money does become available, it doesn’t change the fact that you may never get any money if the banks don’t process your application.
Why Did the Banks Not Process PPP Applications Fast Enough?
If you are like me and sitting on the sidelines with no money from PPP or the other stimulus programs designed to help sustain small businesses, then you might be asking yourself what happened. Well, the banks aren’t really saying, but there are a few things we know.
The Banks Were Overwhelmed
The first and probably biggest reason the PPP has failed some small business owners is demand. There never was enough money to go around considering how impacted pretty much every business in the country is right now. Demand was far more than supply which forced the banks to choose. And they chose their better customers. (Anecdotally)
They Probably Chose the Big Fish
I have no proof of this, but if you were a bank with an overhwelming amount of applications and no real financial incentive (these loans aren’t huge money makers) then what would you do? Knowing that the money was limited, I think the banks sought to take care of the biggest loans first. That way they depleted the funds quicker and had to process less loans.
My Payroll Protection Plan Application Strategy Going Forward
I’m just going to come out and say it. Bank of America and Chase let my businesses down. Both banks took my application as a good customer and then did nothing with it. Someone I know applied within minutes of the Chase application being online only to find themself in the same boat as me with nothing but an automated email. This happened at banks across the country.
If Congress does provide more funds for PPP, small business owners should strategize about how to get their funds. Forget those big banks and don’t count on them to help. That $250 Billion will be gone most likely before they even get to your application. Instead, apply at smaller banks that are willing to process your application as soon as possible. Local banks. Community banks. Online banks. Get to a human. Ask them for help for your business.
Does this guarantee anything? No, but it gives you the best chance of getting money, plus if your big bank comes through you can always just complete the app with them. My personal advice is to not wait around. I plan to be aggressive to protect my businesses.
Payroll Protection Program Application – Bottom Line
The PPP program has now run out of money, but more concerning are the number of small businesses that will fail if they don’t get some help. The banks let small businesses down to some extent, although we’ll have plenty of time to place blame later. For now, I’m going to be proactive about getting any future funds as I think that is the best strategy going forward. And don’t worry. We’re not going anywhere either way.
Did you apply for Payroll Protection Loans with the big banks? Did you receive your funds or have your application processed? Share your experiences with PPP in the comments!
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I had contacted our local bank that we used for our business for 20 years. After 2 weeks of basically nothing from them, they send me an email saying, “To be clear, the Bank has decided not to accept any new applications, so you would need to seek the processing of your application elsewhere”. So even if more money comes down the pipe, they will still not process for me is what they said. The problem here being that they are our Only business account and to process an SBA at another bank, I would have had to have a business account with them before this all started. So I have been denied an avenue to receive PPP funds from my government.
Try Quickbooks site. They are not a bank but they are accepting applications and processing them somewhere. I believe a second round of money is being released imminently. A $480 billion bill was passed today.
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Chase prioritized all their Private Banking Customers, and their biggest commercial banking clients, when it came to the SBA loans. A popular example was getting Ruth’s Chris Steakhouse $20 Million of our tax money. The new head of Chase Business Banking is Jennifer Roberts. Before the promotion, she ran the Affluent & High Net Worth Card Division for Chase. So, she certainly knows how to look after the bank’s VIP’s!
My gut tells me that certain corporate banking clients got early access to applying for PPP. These clients were also able to use a location as a separate entity. Dave and Busters and Shack Shack were amongst those corporate banking clients. They each received the maximum $10 million. Funds ran out before small businesses could even apply.
It seems to me there was a conflict of interest with banks. Get the PPP monies so they can make their loan payments.
Of course the big banks already have a personal relationship set up with large businesses in disguise like Dave and Busters, I used to work for a big business as a corporate analyst and they have hundrends of entities with separate set of books for each entity, and I wouldn’t be surprised of they got bailed out big time. The big and medium sized banks know that and have given their full attention to those clients and left the rest of the true small businesses on the sidelines to deal with automatic answering machines and AI computers. It is sad, but I hope small business owners finally realize how important it is to build a banking relationship with a small bank or credit union and also assess their need for a bank that can actually talk to them and be there when they need them the most. Again, there in nothing a large bank can offer that a small bank or credit union cannot, most of the small banks now have the same benefits that a large bank does plus, they get to know you and your businesss and are there to talk to you when you need them.
Have a very small business with only three to four employees not counting myself want to try and fill out the application by time I get taxes back from the account to do a course it’s already out of money so again as a small-business I didn’t get any help at all it seems that I went to the big Corporation
I too feel shafted. I work with a medium sized bank chain and while I did get form email responses, that’s about as far as it went. Florida is interpreting the freelance rule in qualifying for unemployment very differently than other states and is basically shutting out freelancers. Feel totally helpless on all fronts.
Vote democrat next time (or continuously).
Kudos to all the small banks, one branch banks, county banks, credit unions for helping business owners. I am a business owner and I was so glad I went to the credit union that we have an account with instead of bank of America that we also use for our business. Yes the reason we use bank of america because of the online banking experience but in my opinion they have done absolutely nothing for us all the years we have had an account with them. In fact we asked them for a line of credit a year ago and they turned us down. Straight after that we approached our local credit union and they were glad to help and that’s how we started our relationship with them. I guess they have won our loyalty now for life for getting us the PPP funds within 2 days of application! The commercial lender that helped us worked 14 hour days with his team and they processed all the applications and everyone got money before it ran out. For This kind of service we would never get with the big banks. I am ditching Bank of America and I will never do any business with them or any other big bank. Screw them all, I am supporting our small banks and credit unions.
I am not a small business owner, just a concerned citizen. I have not studied the PPP in much depth at all, and I am all in favor of the program helping those whose businesses have been adversely affected. But is there anything to prevent businesses that have not really been adversely affected to apply for a loan and essentially get free money that is not really needed?
You have to assert on the application your business has been impacted. There is no numerical qualification.
So a business that is greatly impacted is treated the same as a business that is minimally impacted. Seems like a recipe for a lot of taxpayer waste.
I too applied at the worst bank Citibank and applied within an hour of them releasing the application which they were already says behind other banks for releasing their portal. In addition to asking and having to upload documents over and over not only did they not provide a dollar through SBA but they even sent me approval for 2 of my businesses and then all of a sudden sent a statement we are out of funds! Big banks are the worst!!!!
chase is my bank, applied for PPP first day live. Got the “courtesy ” of a email yesterday letting me know funding has gone to limit. Gee thanks. Program along with EIDL was never going to give small biz a hand. Loopholes and workarounds for companies that have lawyers and accountants to find them received it all. And government knew thats what would happen. Have any doubt? Stock market up over 3% today. That’s all that matters, thats what the programs were designed to do money to money
I had a fantastic experience with my bank, a community bank that I’ve had an account with for more than ten years. Although I’ve never had a loan and I don’t think anyone in the bank even knows who I am, when I contacted them a few days before the application process opened I was put in touch with a loan officer who sent me a list of what they typically need. The night before the applications opened he sent me a revised list and I gathered everything together and sent it to him. This loan officer worked nights and weekends to get the loan applications processed. There were two Saturdays where he contacted me either for more information or to let me know I was approved. Yes, I am one of the lucky ones. I always recommend to my clients that they go with a community bank because you will get better service. Don’t forget that on April 24th Pandemic Unemployment applications open and you will be able to file for $600/week in unemployment payments even if you are not eligible for unemployment benefits in your state.
I just have to defend my industry here (not the big banks though). I work for a mid-to-large regional bank and was heavily involved in trying to get this program rolled out to our bankers. First, let me say that most banks usually take at least a year to prepare for a program like this. We barely had a full week…and a little over 12 hours from when the SBA finalized the program to when we had to start taking applications- and their guidelines still changed several days after that! We HAD to take the applications in the order they were received- due to regulations banks can not discriminate based on the size of the company. And from the clients I’ve seen get funded- they ranged from very small mom and pop companies, restaurants and bars, hotels, Doctor/dentist offices, non-profits, consulting companies, mid sized companies and some larger franchises with their requests ranging from $10,000 to $500,000. So it wasn’t just the ‘big guys’ getting funding.
And, yes, we’ve also heard the bad stories about the larger banks…with some of them even telling their clients to go somewhere else to apply. Most of our bankers know their business clients and contacted them up front letting them know that they were there for them…I guess that is one of the main benefits of banking with a smaller bank.
It does suck that the program is already out of money. Our bankers are absolutely crushed having to tell some of their clients that they won’t be in this round of funding (and possibly not the next one either). But we all busted our butts to get this program going (and getting our systems to be able to process the apps) because we all knew our clients desperately needed it and I’m damn proud of the funding we have been able to secure for our clients. Most of of our bankers worked 12-14 hour days and through the weekends to try to get as many apps in and clients funded as possible.
Thanks for sharing your knowledge and perspective! I’m sure it had to be quite stressful to implement this so fast. Hopefully more small businesses will get a chance to apply.
Thanks so much for commenting!
I would love to have my company bank with a bank like yours. When I started my business, yours was the kind of bank I went with and all was good. Then came an acquisition by a bigger bank, then another by a bigger, bigger bank, then the ’09 recession, and then finally they were acquired by BoA. Unfortunately, in my metro area, all of the commercial banks are the biggies or they have a small regional bank appearing name, but in fact are owned by a big international bank. I am sure your clients appreciated your hard work..
Well… our parent company IS a global international bank…but The entire purpose and company values are based on our people and customers.
I think the problem is less with your banks than the system itself. I hadn’t realized until today that giant companies like Dave & Buster’s got to claim every location as a separate business. When companies of that magnitude get millions of dollars each, the pool of money for real small businesses like yours and mine get the leftovers. Except that there are no leftovers in this case. That’s why concerned politicians are not just willing to rubber stamp another huge giveaway to big companies at the expense of the little guy.
Let’s hope they figure out a way to get any future money to real small businesses. I get it that loopholes will always exist, but it does seem like many with a lesser voice were left out.
Bank of America has never done anything for my business. I applied in the two days after the applications began with Bank Of America. I got a confirmation that they wanted me to upload my documents (again) to this intralinks sight. I did that within an hour. Received a call that they wanted to confirm I uploaded my documents and then…nothing. It’s been a little over a week since no communication. A friend of mine who applied for $380,000 through a small bank received his money in 4 days form applying. BofA is absolutely worthless, they told all of us to not go to the branches and not call them. Unbelievable…no, I’m sorry, it’s totally believable.
I never comment on boardingarea blogs, but I work for a bulge bracket bank and have been processing PPP loans and no one here seems to know what they’re talking about at all so I thought I’d weigh in for once.
These loans are not a sham and were certainly a core focus of the entire organization. Within 24 hrs of the government finalizing the program we were all participating in mandatory training on order to drop everything and process any application we got immediately (the lack of organization and sufficient capital is a government issue). The loans are completely forgivable and backstopped by the SBA so we are doing almost no underwriting and are required to fund within 5 days of an application being received. It’s not that banks make little money from these, we make NO MONEY from them and will inevitably be fined for some aspect of this (we are utterly and completely terrified of regulatory fines and it’s paralyzed us into not providing liquidity in other business lines at the worst moment possible – thanks Elizabeth Warren)
We are ready to fund our backlog of applications as soon as Mitch McConnel decides he wants to inject more cash and will undoubtedly do it faster than the government institutions (like the IRS) that the GOP has spent the 15 yrs hollowing out to the point they have no capacity for any emergency. Don’t blame the banks for the lack of leadership in Washington. There are a lot of bankers and back office tech teams who went round the clock (not me) to roll out this program and they don’t deserve your uninformed diatribes)
Please correct anything that was wrong in the post, but I do know what I am talking about. I agree these weren’t a sham (I assume you are responding to other comments), but the facts are many businesses didn’t get them. Many banks also delayed the process and banks favored larger clients. All of that is documented.
One last thing. The banks are getting an origination fee on these loans so they ARE making money. As to whether that is profitable I would assume it depends on a number of factors and will vary by bank. But to say the banks get nothing is simply not true.
Anyway, no need to insult people in your comments. Informing, helping and sharing your experience as a bank employee is welcome. We cover the banks a lot here and do it in a fair way I think. For many many many businesses the big banks did them no favors with these programs.
They didn’t make the system though so as I say we can find places to lay blame later. For now hopefully businesses that need it most will get some more funding approved by Congress.
We are truly a small business. The SBA held off EIDL applications for sole proprietors until April 10th. Our bank held off PPP applications for sole proprietors, self-employed, etc (the truly small) until finished with the big boys. So even though we applied “day 1” to both, we have received NO support funding. There is none left for either program.
Wall Street Journal said that Chase presented Ruth’s Chris Steakhouses with $20 million in PPP on day 4 of the program. Chase even found a way to split Ruth’s into two pieces to get around the $10 million maximum. Congress/SBA wrote a loophole into the original legislation to make the chain eligible.
Find a bank that will take the lead, that angelic banker who really looks out for you. Excuse me. I was just dreaming there for a second.
These program are a sham. Don’t bother applying, it’s not worth it. Sort of like student loan forgiveness. A big joke.
Taking out a loan for school and having your revenue and livelihood shut down by a state order is a little different, no?
Both programs (ppp loans and student loan forgiveness programs ) are both sham benefits promised by politicians in order to get votes. The actual % of people getting these benefits in extremely small, in the case of student loan forgiveness less than 1/10 of a percent. I expect the actual % of people who actually receive the ppp loans to be in the same neighborhood.
QuickBooks stated that they were rolling out a quick an easy program which delayed me going to the bank. We should start a class action lawsuit against them since the never effectively communicated nor rolled out the program as they promised. I now have received no funds nor filed an application and the government is out of funds! This is absolutely unacceptable!
The company I work for applied and was funded by a small local bank (like you recommended using when and if more money opens up). They contacted us a few days before the application opened and let us know what they would need from us. They were very proactive and helpful. Good luck in getting part of the next wave of the money.
Did you get the same “runaround” I got from BofA? I tried applying the first couple of days and was told that my small biz “C: corp did not meet their criteria because I did not have a business credit card or credit line with them. Only a biz checking account. The Co. never had a need for a credit line w/ them. I then complained to my local SBA and congressional reps. I then emailed BofA’s National SVP for Small Biz Banking on that first Sat AM. She actually called me back. She stayed on the phone w/ me while I filled out the app. 10 days later, no approval/disapproval. Just a constant barrage of more BofA emails (4 yesterday) saying I need to submit additional information…to which I already have done, multiple times.
Just remember, that small biz called Ruth’s Chris Steak House got their multi-million $ PPP loan in 2 days…hmmm. I was just asking for $15k to keep some highly skilled techs.
I didn’t but that is a whole other aspect of this story I could have dove into. These same big banks only even allowed their full customers to apply. So the people at Chase and BofA who mostly got the shaft are customers with tons of accounts with them.
As for BofA I have a CC and a business bank account with them so I qualified without issue. The fact that they were turning down customers without existing loans is terrible. Another reason to definitely re-think our business relationships with big banks.
I applied for all 3 ppp, sba, and the quick 10 grand.. Thru Shitty bank aka (citi) for the EIDL AND 10K QUICK PAY and a credit union for the PPP Got 2k Grant (Provided its used for payroll) last week as part of the EIDL and approved for a nice sum @3.5% for 30 years…
For the PPP according to the CREDIT UNION bank i was somewhere between 2000 and 2500 in line for the application I submitted. Never heard nothing from them. Got a email yesterday stating program ran out of funds….
Glad you were able to get EIDL. Hopefully your PPP app is high up if/when they get more funds.
I got basically steered into the EIDL process from BofA from the “getgo”, they dragged their feet w/ excuses on the PPP from day 1
I applied within hours of when the ppp link went live on our bank’s website. My bank is a Texas bank – Frost. I did get a call from our bank rep that we were approved and should see the funds on 4/20. I am hearing from other business owners that small community banks were getting the loans out to their customers. One franchise owner I know said he knows of another owner who went into his community bank the same day the loans became available and walked out with the money the same day. Also have heard that Chase did not come through for at least 2 business owners I know.
It was by design, despite the branding and flashing of the program, it was never conceived of as assisting “small” business. It was a sleight of hand. The country is being run by con men, you have as much chance of winning a grant as you have in 3 Card Monte Scam.
Just wait, it takes a while to drain the swamp. They’re working hard on it….any day now.
I’m sorry to hear that Shawn! Yea, what can you do now? Thanks for sharing. I was wondering about the process.
Just wait for more money to become available and try to get a bank that will process applications quickly. Thankfully we aren’t in nearly as bad a position as some others I know. Always room for gratititude.
As for the process, I think the best move is finding a bank (if one exists) that can process these apps quickly. That’s the only way you’ll get in before it runs out of money again. These big banks all have HUGE backlogs of apps and $250 Billion isn’t going to go far.
I wouldn’t waste your time. It’s all a sham,
Sorry to hear about your situation. Here in Canada I have a small business and the government has provided a 75% wage subsidy for employees along with a $40K interest free loan which $10K is forgivable if $30K is paid back by December 2022.
Interesting. Did that program have caps as well or were all businesses able to get it? I’m glad you were able to get your funding!
More info: companies – large, medium, small, and non-profits – that have had a reduction in revenue of 30% will be eligible for the 75% wage subsidy, regardless of their number of employees.
The subsidy will apply to 75% of the first $58,700 earned, which could amount to payments of up to $847 per week;
Employers are encouraged to top up their employees’ wages with the remaining 25% of their salaries; and Payments will be backdated to March 15, 2020.
Government has also introduced a 100% wage subsidy for hiring students until the end of the year.
Regarding the $40K loan, as long as you had $20K – $1.5 million in payroll in 2019 your small business would qualify. No caps on the number of loads or funds available.
I should also mention, if you are self-employed and made $5 last year or are currently making $1000 or less a month you would be eligible for $2K a month for 4 months no questions asked.
edit: if you are self-employed and made $5K last year…
I only use local credit unions and online banks. I never understood the appeal of a big bank. Their fees and minimum balances are always harder and the service is almost never better than what you can get from credit unions.
Having strong relationships big banks has been beneficial in getting certain products and offers. With that said, I am very low maintenance and don’t use my banks often for anything advanced. My fees at the big banks are waived, but I don’t count on them for good service. Now, it is clear that having a more personal relationship with a local banker (even if I still do business with the big banks) is the way to go.