- Congress passes additional $484 billion in financial aid, including $310 billion for the PPP
- ABC: Lenders predict this amount of funding will potentially run out “in the first two days”
- Ortiz: An estimated $1 to $1.5 trillion in PPP applications in SBA pipeline
- Chase suggests customers might have better luck applying to other banks given high demand
On Friday, President Trump signed the “Phase 3.5” relief bill, providing an additional $484 billion in financial stimulus to an economy crippled by the Coronavirus pandemic. Of the total stimulus provided, approximately $310 billion has been allocated to replenish the popular Paycheck Protection Program (PPP), a program designed to provide small business owners with much needed financial relief that ran out of money only days after opening. As the SBA aims to get the PPP re-opened as early as 10:30 AM today, the replenishment of funds is welcomed news to many small business owners who could not secure funding in the initial phase. However, lenders are already warning that these funds will not last long.
As reported by ABC News on Thursday, many lenders fear that these funds “…will run out in the first day or two,” citing the overwhelming demand from small businesses. According to Alfredo Ortiz, President and CEO of the Job Creators Network, that demand could total an estimated $1 to $1.5 trillion worth of applications in the pipeline for the SBA to review and ultimately fund, if approved.
Lenders have already began to take pre-emptive actions to reduce the volume of customers submitting applications to their bank On Thursday, JP Morgan Chase warned customers that they might be better off applying to another bank, especially if their application was in the early stages of the process with Chase. The bank provided customers with the status of their application via email, in some cases telling customers, “Your application is still in Stage 1, with an extremely volume of applications ahead of yours. We wanted to give you this information so that you can decide if you would like to try applying with another lender.”
Our CRT has assisted our clients who have gone through the application process at banks varying in both size and geographical region that they normally serve. The knowledge our Team has built from these diverse experiences will allow them to assist you through your own process in the event that you are assessing your options on where to submit your PPP application and the timing of your submission.
Visit the DSJCPA COVID-19 Information Center to Meet the Team and stay current on the ways our CRT can assist you and your business.
Chief Business Officer, Disaster Relief Consultant