I have watched 4 webinars, talked to 2 law firms, and called my bank (Chase) and…I’m still unsure how to actually apply for the Paycheck Protection Program (PPP) loans administered by the SBA as part of the CARES Act (mouthful!).
And to be clear – the guidelines are still changing. Banks are scrambling since the Treasury Department issued revised “interim final rules”.
🚨 The most critical information I can provide is to CALL YOUR BANK 🚨
Many banks are only just now in a position to start accepting PPP applications. But because the program is first-come first-serve, having a good relationship with your bank can potentially expedite your application.
Having gone through the new “final” rules a couple of times, here’s what I’ve learned:
I know it’s a lot (imagine reading through 35 pages to get to 7 key bullet points!), but there are additional resources that make it easier.
Our friends at Sevenrooms put together a comprehensive PPP loan forgiveness calculator. This is the best one I’ve seen out there.
Here are the PPP “application” portals for various large or active SBA banks. I say “application” because they’re really just contact forms. As mentioned earlier, the program is first come, first served, so please get your application in ASAP. Note that most banks are only accepting applications for existing business customers, so again, the best advice we can give is to contact your bank.
I managed to get approval for a PPP loan for my parents’ restaurant through Chase in a couple of days (more luck than anything I imagine). Here’s what the process was like:
The process was only efficient because we already had all documentation ready to go before the banker called. He mentioned that some applications could take >1 hour because people weren’t ready with their payroll records and application docs.
Even though it wasn’t as painful a process as expected, there are still some serious lingering questions about how exactly the PPP will help restaurants.
From my standpoint, the critical flaw in this legislation is that it assumes things will be back to normal within 8 weeks from getting the money. You need to hire back the folks you let go within that time frame.
Looking at my parents’ restaurant and the current state of NYC, let’s assume we apply next week and get the money by the end of April. Per the legislation, they need to hire everyone back by June 30th. Even if they did reopen for takeout and delivery, there just won’t be enough demand to warrant hiring everyone back.
After all, in normal times delivery is only ~30% of the business. So can you even stay profitable if now you’re handing over 20-30% to third-parties on >90% of your business? And even if you can’t then, do you just lay-off everyone again after 8 weeks?
I think the rules are still far from final and I wouldn’t be surprised if an extension gets baked in once the program is up and running, but something to keep in mind.
At the very least, it’s cheap money that you can (hopefully) take advantage of today.
I know things look tough, but it’s so inspiring to hear about all the ways in which many of you are adapting. You give me hope and courage to continue fighting for our collective future.
Here are the couple things that are working:
I spent some time crying by myself late last night. Was it the adrenaline of the past 2 weeks was finally wearing off?
Or realizing that my parents, who – having gone through 9/11 and the financial crisis + subsequent recession – just closed their doors for the first time ever?
Maybe it was listening to my 4-year old talk so sweetly before bed about missing the beach, his friends, his school…all remnants of a past-life that was so real just 6 weeks ago.
I know things are tough now – tougher than they’ve likely ever been before. Be strong. Be creative. You got this.
As I said earlier, I’ve been so humbled by how many of you refuse to accept the situation and just be complacent.
I’m so thankful to have you as part of this community. And if you ever need to talk – about what I’m seeing in our data, or where our industry is heading, or what you’re watching on Netflix (yes, Tiger King is worth it) – then I’ll do what I can to be here for you as well.
Above all, stay safe, stay healthy, and stay positive.