URGENT PPP UPDATE: larger banks may hit their max and be cut off
April 27, 2020
In this 2-minute read:
- New SBA / PPP rules as of 4/26/2020 set a max per lender of 10% of the available “pot” of money
- Larger banks may hit their maximums and be cut off from further PPP loan approvals
- It is unlikely that smaller lenders will hit their maximum
On Sunday, April 26, the SBA and Treasury announced that they are instituting a maximum dollar amount of 10% of PPP funding authority that any single lending institution can originate.
This means banks and lenders with larger pools of PPP loan applications may be cut off at some point. The E-Tran system started processing loans again for the second round of PPP funding, totaling $310 billion, on Monday, April 27.
This could mean many businesses who’ve had their PPP applications approved by larger lenders won’t get funded. If you’re concerned about this possibility, you can apply via a smaller lender. We recommend you start your free application here.
Womply is acting as a facilitator to connect American small businesses to SBA-authorized lenders to get emergency loans for COVID-19 relief. Start your free application here, or call us at 855-208-8813 for a free consultation.
If I have submitted my PPP application via a large lender who may hit their maximum, should I reapply with a smaller lender?
Based on the new information, we have revised our recommendations on completing multiple applications.
The SBA added a rule as of April 26, 2020 that caps each lender at 10% maximum access to PPP funds. The technical implementation details aren’t clear (and could be complex).
However, as a result of the SBA’s system updates and details of how the $310 billion “second round” will be allocated, you now have almost no risk of receiving more than one loan for the same tax ID number.
But if you applied with a big bank processing thousands upon thousands of applications, you may miss out on the PPP this round. It’s unclear if the PPP will get additional rounds of funding.
Given the feeding frenzy that is occurring as the E-Tran system opens again on April 27, 2020, we think it might be a good idea for you to take the extra time to submit an application with at least one of the smaller SBA 7(a) approved lenders Womply is working with.
It’s more work for you (and for us) but it could make the difference between getting approval during this round of funding or not.
Remember: you are not obligated to apply with your bank and the terms everyone receives on the PPP are identical—and it is always free to apply. We recommend you click here to start your free PPP loan application.
If my bank is overwhelmed with PPP applications, how will I get my loan?
How each lender handles excess applications is up to them. It’s possible they might direct them in the background to other lenders, tell their customers to apply elsewhere, or do nothing and hope the government approves more money in “round 3” and their customers might get funded at that time.
If I wish to submit another PPP loan application with a different lender, who can help me?
If you are waiting for approval of your PPP loan via a large lender, we recommend you reapply via a smaller SBA approved lender ASAP, as the replenishment of PPP funding will likely go extremely quickly as the SBA’s E-Tran system resumes and ramps up operation.
Womply can help. We are working with SBA 7(a) approved lenders that can help you get your application processed in a timely manner.
To start your free application, click here or reach out to us today at 855-208-8813 for a free consultation.
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