“From what I understand, the banks will be offering some form of SBA loan for payroll support, with a provision for wage costs to be waived after a few months,” the email, sent two days later, said. before CARES Law has been promulgated. “It’s something we both need and want. Can you put me online to request it when the bill is passed and we know what the conditions are? “
We are not alone, millions of small businesses – including Ben’s Chili Bowl – are faced with the same reality. And while the program is likely to be reconstituted by Congress soon, those who remain are still uncertain whether we will get the loans this time around, and whether it will be too late to save the business as it is now, even though we will end up being eligible .
Thanks to loyalty of our long standing advertisers and the generous contributions from our readers, ARLnow will weather this storm in one form or another. But a PPP loan would make a big difference in our ability to retain our workforce and our original reporting level in the future.
For those interested in the details, here is an account of our experience with PPP. Hopefully this can be informative for those trying to figure out how it worked (and didn’t work), or cathartic for small business owners in the same boat.
But first, three caveats:
- It is not unique. Many small businesses have also been left dry.
- It’s just a snapshot. We only applied through one bank, so those who applied to other banks would have different experiences.
- Many companies have obtained PPP loans. Axios, Clarendon-based media company announced today that he qualified for a $ 5 million PPP loan. Shake Shack got $ 10 million, but is give it back in the midst of a backlash. Tens of thousands of businesses in Virginia, Maryland and DC collectively received $ 16.5 billion. And those who do business in smaller community banks seem to fare better than those who use the big banks.
Friday April 3
We emailed the person we were told was our main point of contact at PNC’s main office in Arlington on the day the Small Business Administration was due to open its PPP loan processing window.
“It looks like banks can start lending under the CARES Act wage protection program. ” we asked. “How can we move forward with this? “
Our PNC contact responded promptly, letting us know that “like other financial institutions, we are reviewing additional guidance from the US Treasury and awaiting final guidance and details from the Small Business Administration.” This would be the last time we would hear a PNC human until a registration email on April 16, the day the program ran out of money.
Applying with PNC made the most sense to us. We have been banking there for the past decade as a business, and our owner has been banking there personally since he was a teenager in the 1990s. In addition, a myriad of articles on the subject of P3s said business owners would be most likely to apply to their existing bank, which is more familiar with their financial history.
The fact that we also have a loan relationship with PNC, in the form of a long standing line of credit, would also help, theoretically.
PNC opened for applications on its website Friday night, but didn’t announce it to clients (at least not us) via email.
Monday April 6
Not wanting to wait for a response, we checked the PNC’s website and after clicking a bit, we found that the bank was accepting requests online. Don’t try to apply at a branch, the website is the only way to apply, he said.
Very attentive readers may have noticed a slight lull in our media coverage on Monday noon as we tried to navigate the application process. At first we struggled to load the app. Then when that happened, we started working on the questions and uploading the appropriate documents.
The first issue we encountered was that the app was showing a IRS Form 941 – which reports “income taxes, social security tax or medicare tax withheld from employee paychecks” – was one of the documents we had to submit. The problem is, we don’t file Form 941 because we, like many other small businesses, use what’s called a PEO.
A PEO, or a professional employers’ organization, is essentially a full-service payroll service provider that also handles some of the administrative work and human resource functions involved. A PEO files their own Form 941 on behalf of all of their member organizations – as in, every company they work for is on the same form, and we do not file the 941 individually and do not have access to it.
Justworks, our PEO, assured us that the Small Business Administration had in fact decided that it was not among the required documents, even though the banks still requested it. Instead, they implemented a tool to generate a nifty PPP report, allowing you to instantly download a spreadsheet that (we’re told) meets SBA requirements. We uploaded this to the PNC app and prayed that it was enough.
The second problem we encountered was more intimidating. The PNC application made you download a PDF, which you then had to initial, date and affix an electronic signature. Fortunately, we had the software and the technical sense to do it. Unfortunately, it didn’t work. Over and over again, we would download the document and be told the signature was missing.
Fortunately, extensive research on Twitter provided the answer. A random user, contacting the PNC customer support account, said they fixed the issue by switching from Mac to Windows. Our owner emailed all the required paperwork to himself from his MacBook, turned on the original Dell desktop computer that was used when ARLnow started a decade ago, and redone the whole process. .
This time, after a few hours of work, the request passed. And the email confirmed the submission and assigned an ID number within 10,000.
“We will review your request to verify that it is complete and notify you of the next steps,” the email read. “Given the expected high demand for Paycheck Protection Program loans, delays in processing your application are expected. Information on the status of your application will NOT be available through our branches or customer service contact centers – due to the nature of this loan process and the steps involved.
It’s been since reported that bank employees worked tirelessly to deal with a tsunami of PPP demands. But this work was not apparent to us for the next two weeks.
Lots of monitoring of our email inbox, frequent check of the request status page and registration email with our branch manager. The only update: “under review”.
Saturday April 18
An email from PNC confirmed what we already knew: that the money was exhausted and that we were still online. But, a ray of hope.
“We will continue to process your PPP request that has already been received for future registration if the SBA extends the PPP program and begins receiving requests again. “
“The business information is incorrect or missing (requires a new or updated application),” the email reads.
He did not provide any further information on what was missing. A review of our request did not show anything that seemed out of place, and asking what was incorrect or missing was not an option.
“Please note that information on the status of your application will NOT be available through our branches or health centers – due to the nature of this loan process and the steps involved,” the email reads. “Do not include any questions in the answer because we will not be able to answer them within the allotted time.”
We filled out the application again, signed the PDF again and sent it back, along with the Justworks spreadsheet and an additional letter from Justworks explaining what a PEO is and how its spreadsheet contains everything the SBA does. must know. Fingers were crossed when the end button was pressed.
Wednesday April 22
Nothing has changed. The status always indicates “under review”.
“With the large volume of applications already submitted to PNC and other lenders, it is quite possible that not all qualified applicants will receive the loan proceeds under the PPP even if Congress authorizes additional funding. “, reads the bottom of the status page, before reiterating:” Information on the status of your request will not be available through our branches or customer service contact centers. “
We have taken several other steps to try to cover our bets: ask for grants, deferral of certain social charges, opening an account at a small bank, but we just don’t know what the future holds. For now, we’re still here, working hard to cover our communities, serve our customers, and try to keep the lights on.
PPP is a worthy program, meant to keep small businesses afloat and their employees paid during the coronavirus crisis. But there will be winners and losers in the end, and the worry for us and many others is that we will end up on the wrong side of this great book.