This CARES Act update sends two messages: If you have applied for any of the SBA stimulus programs, you aren’t crazy, and you aren’t alone. Odds are that you haven’t received the $10,000 grant that was promised in 3 business days — and your application to the Paycheck Protection Program (“PPP”) has not been accepted, much less processed.

So, what happened?

• First, banks did not initially accept PPP applications: Banks did not have adequate information from the SBA to accept the applications.
• Then, when applications opened, acceptance was selective: Bank of America, Wells Fargo, and many other major banks turned away applications from those without a lending relationship.
• Finally, the floodgates opened: 48 hours after beginning, some major banks reported they had received more applications than their allocated capacity. This has resulted in an acceptance freeze from those banks

What are they doing about it?

• The Federal Reserve is taking on SBA loans from banks. This should increase capacity beyond what the banks’ balance sheets can absorb
• The Fed will also provide a “Main Street” direct lending facility to process new applications
• Some banks are prioritizing companies with 50 or fewer employees, focusing on the most vulnerable small businesses.

What do I do now?

If your application has been accepted, welcome to the approval waiting game. Some banks are restricting updates to email only to alleviate call volume, and we have no reliable timetable to share.

If your application has not been accepted or even submitted, it may be time to apply with smaller community banks and credit unions. They may have capacity where larger national banks do not.

It is important to remember that you can apply for the PPP through multiple institutions (though you can only accept one loan) so, if you are waiting or applying, don’t be afraid to shop which lenders in your area have the most capacity to quickly process your application.

In conclusion, there have been material bumps in the short road these programs have taken, but we are told they will deliver in time. We are monitoring news as it is released and will continue to update you and answer any questions we can.