Montrose creates loan program, aids in tax relief for small businesses

Ruben Fields
April 4, 2020

The program is being overseen by the Small Business Administration but banks are the ones who handle the application process.

The so-called Paycheck Protection Program, administered by the Small Business Administration (SBA), is aimed at keeping businesses with less than 500 employees from having to fire their employees.

The program was rushed into operation just one week after the signing of the historic Coronavirus Aid, Relief and Economic Security Act - or CARES - Act, with final rules not posted until Thursday night.

The money is first-come, first-serve, so naturally many business owners are eager to apply. "Please go back to them because they're your core bank and they know you the best and can process you the fastest", he said.

Bank of America chief executive Brian Moynihan told CNBC on Friday that his bank, the largest in MA, received 10,000 applications within an hour after it started accepting applications at 9 a.m. (BofA is limiting access to preexisting business customers that have both a checking and lending relationship with the bank.) Other big national banks were lagging behind.

Boca Raton Mayor Scott Singer said he is also fielding calls from small business owners about problems with the applications.

Khanna told Fox News that the Trump administration has not "made a firm commitment" as to when the rules surrounding SBA loans for startups would go into effect, but added: "We could have clarifying guidance on the issue as early as tomorrow".

On Friday morning, US Bank repeatedly told her it was not accepting loan applications and offered no clear time frame. "It will roll out over the next couple of days".

"Small lenders, community banks, regional lenders, non-bank lenders like myself, and even the biggest banks are not going to have the capacity to make these loans and keep it on their balance sheet for any period of time", Hurn said.

77 confirmed cases of Covid-19 in Donegal
Dr Holohan said if you are still waiting for a test result the "important thing" to remember was to self-isolate for 14 days. Colm Henry, Clinical Chief Officer, HSE, said; "There is now a clear picture of more severe illness in older people".

Khanna also said he hopes the potential flexibility for startups due to the coronavirus pandemic - which has crippled businesses across the country - will turn into a more long-term change. But lenders must still verify borrowers are who they claim to be and the amount borrowed is justified.

Those eligible to receive a loan in the Paycheck Protection Program include small businesses that employ 500 people or less, tribal businesses, 501© (19) veterans organizations, 501© (3) nonprofits, including religious organizations, independently-owned franchises with less than 500 employees and approved by the SBA. Payroll costs are capped at $100,000 annually for each employee.

The loans carry a 1 percent interest rate, but interest payments are deferred for six months under the program. Roughly 5,200 loans valued at $.8 billion have been processed so far, said Jovita Carranza, administrator of the Small Business Administration., on Friday afternoon.

The Pennsylvania Industrial Development Authority approved funding for the loan program which provided businesses with 100 or fewer full-time employees with up to $100,000 to use as working capital.

Jane Gideon tried to apply through Bank of the West, which said it wasn't ready to accept applications, and an online lending website, to no avail.

"It's not like you just snap your fingers and, 'Oh, let's start offering this brand new loan product where we just found out the interest rate yesterday, '" said Scott Pearson, a lawyer at Manatt, Phelps & Phillips who advises banks on compliance. "We think we have a grasp", Evans said. "When you take two or three weeks off, it is like forever". All loans will have the same terms regardless of lender or borrower, according to chamber officials.

"We are communicating directly with our customers to provide details about the loan program and how to apply", the company said in a statement. We have heard from numerous employers nationwide who were enjoying record business activity just weeks ago and are now on the verge of bankruptcy. But, he said, he doesn't have a choice but to keep on trying.

Connect with us on Facebook.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER