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PostPosted: April 4, 2020, 1:32 pm 
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Joined: November 11, 2013, 4:47 am
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Location: No. Nevada
https://www.sba.gov/page/disaster-loan-applications

Here is a chance for some of our small business folk to stay open or maybe even expand a bit. :D

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PostPosted: April 4, 2020, 6:03 pm 
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Joined: June 20, 2019, 12:34 pm
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The problem will be to find a bank that will do the loan! The Bill states that the Bank will loan at prevailing rates (0.0%-0.5). The banks will loose money on the loan at these rates.

Next is the problem that the Bill states that the Bank must:
1. Verify the company borrowing is keeping its employees on
2. The Bank must monitor that the company continues to keep the same employees on.
3. If the company lays off or fires one or more employees, the company is not in compliance. The Bank must then foreclose on the loan or the loan will not be guaranteed and the Bank will be faced, for every failure, a hefty fine (multiple of the $ size of each non-conforming loan).

Banks are not set up to do this! Can you imagine how many additional employees the bank would need to add to police this? And if they are loosing money on each loan, why would they do this? JP Morgan's CEO, Jamie Diamond. said without a change in the bill, they will not do these loans. And other Banks are following!

Many Banks will be laying off employees soon due to the two recent reductions in the interest rates plus the fall of the market. I do not see how they can be convinced to take these loans on now at severe losses and risk of fines by the govt.

Thom


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PostPosted: April 4, 2020, 11:05 pm 
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Joined: November 11, 2013, 4:47 am
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Location: No. Nevada
Following news threads it appears the interest rate allowed has already been increased in order to get banks to participate.
I put in an application on the theory of 'What the #$!!, nothing to lose".

$10K would let me hire an assistant and finish Dio #2 Triumph/Buick very quickly.
I already have nearly all parts on hand.
An example I would rate as inferior to my planned build just sold on BAT for $22K. :cheers:

https://bringatrailer.com/listing/1965-triumph-dio-ambro/

BTW, the program is available to Sole Prop's!

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PostPosted: April 5, 2020, 6:46 am 
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Joined: August 28, 2010, 7:53 am
Posts: 233
I have a small biz with 2 employees. I am trying to apply for the Paycheck Protection Program. The small banks are not on board yet, so i might have to call BoA. The banks definitely make $$. From what i read, they are not financing the loan, just dispersing the gov't $$ and they will get 1% commission. All subject to change, however, over $4billion in applications was submitted friday


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PostPosted: April 5, 2020, 7:22 am 
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Joined: June 20, 2019, 12:34 pm
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You are right in that the Bank does not use their funds but disperse from the Feds funds. The loan is funded by the Bank and the Feds accept the application the company filed if it meets the standards and reimburse the Bank. The funds are to meet payroll, not for other company uses. The Feds initially said you could download the application from them and after completing it you could take it to any Bank. But the Banks cannot work with that application. You will need to complete the Bank's application.

As of Friday evening at 6:00PM ET, the Feds did increase the amount of interest payable to 1%. They also said the Bank now will only have to qualify the company as to what the applicant states is "true" as to the employees are still on payroll and will continue. The Bank is no longer required to track what and how the company is using the funds.

BofA was first online for applications. Their system crashed. And they now have a huge problem. As of last night, only 4 banks are accepting applications. Many more will roll it out the first of this week.

Stay tuned!


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