SBA is BROKE — NO MORE PPP Small Business Stimulus Money CARES Act

Today is April 17th and here is a quick video to give you guys an update on the EIDL and PPP status.  As I shared with everyone last Thursday, April 9th, our PPP loan was approved and funded using a local community bank Blue Ridge Bank, this was a quick and painless process and community banks across the country have really stepped up to the plate to help out with small businesses.

Many of the large national banks, just could not get their act together and they have failed miserably.

For any of you that isn’t exactly sure what I am talking about, a quick summary:  The Payroll Protection Program (PPP) is a forgivable loan given to small businesses to help cover payroll for 2.5 months.  I cover this in greater detail in my April 9th and April 13th videos, link in the description.

This is a great program that basically gives small businesses free money to keep Americans employed.  One of my small businesses, AutoCorner, took out one of these loans as it was foolish not to accept free money.

Sadly, today the SBA announced they have exhausted ALL PPP funds and until Congress authorizes additional funds, no other US businesses can get a PPP loan/grant.

Now over to the Economic Injury Disaster Loan (EIDL) and this has turned into a cluster-[you-know-what].  Remember this was the one that originally was touted as giving all small businesses a free grant of $10,000 within three days, then it changed to $1,000 per employee and would be paid “in days” no longer giving a number of days, just saying “in days.”

I guess this could mean 3 days, 10 days, 30 days.

For me, it has been 18 days since I applied for the EIDL and I still have not received any advance of grants.  But, I’ll get to that in a minute.

On Friday, April 10th and Monday, April 13th, respectfully, I found two credit inquires on my Experian credit report from the SBA.  This made sense as I applied for the loan for two of my businesses. 

Yesterday morning (April 16th), I received my first communication from the SBA since applying.  The email told me to generate a login and review my loan options.

I followed the link, created my account, and logged in to the SBA had approved us for a $265,600, 30-year fixed rate at 3.75% with no payments due for the first year. 

Honestly, I am not sure how they calculate the amount of the loan as a friend of mine has more revenue per year in his business, but he was only approved for $175k and I have another friend that makes less than us and was given just under $500k. 

Obviously, there is something in the SBA’s calculations that determine the numbers, but I am not sure how they arrive at these numbers.

The funds can be used for normal business operating expenses, however, if you also have a PPP (which we do) then you cannot use the funds from EIDL and PPP in the same expense category.  For example, if you use your PPP for payroll you cannot use the EIDL funds for payroll as well.  This is slightly different from my original understanding, based upon media reports.

Of course, I am not a CPA, I’m just a dude on the internet.  So, you should check with your CPA.

So, in my opinion, because we keep very diligent accounting, it will be simple for us to allocate the funds from each of the EIDL and PPP appropriately.   We will use the PPP to cover 2 months’ payroll and the EIDL for a few months of on-going business overhead expenses.

With a 30-year fixed rate at 3.75%, it is basically borrowing money for free to run your business.  Of course, this is a loan, so you must pay it back, but the beauty is you are paying it back with future money and when you factor in an annual inflation rate of 2%, the money is only costing you 1.75%. 

The process of accepting this loan was simple but still took me about 2-hours.  The reason for that was the SBA website was slammed with traffic and I kept getting error messages from the website.  It took me 20-30 minutes to make it through each “click here to do something” link, then finally I received my confirmation.

This was the loan for only one of my businesses, and I am still not sure if or when I will be approved for the other business of mine.  I also still have not received any of the advances, so I am not sure if, or when that will be deposited either.

I did get a follow-up email sent to me this morning from my loan officer at the SBA.  She needed some additional information from me, I replied back immediately and hope now we can move to sign the loan documents and funding.

I know this was a short video, but I wanted to give you guys a quick update on the status.   Please make sure you like & subscribe, it really helps. 

Also, please use the link in the description to open and fund your Webull stock trading account with $100 today and get two free stocks, with one of them, valued up to $1,400.  NOW is the perfect time to invest in stocks while the market is down.

I hope everyone is safe out there.  I don’t know about you, but dang I really need a haircut so I hope this shutdown is over soon.

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