April 23, 2020

SBA PPP Loan Program Status Update and Next Steps

Updated Thursday, 05-14-2020 5:02PM (CST)

As of May 14, 2020. Tulsa FCU is no longer accepting PPP applications.
Our staff will continue to work diligently to process and prepare any previously received applications for SBA approval before funding is fully committed.

Please note: Application submission does not guarantee approval.

Updated Fri. 04-24-2020 2:15PM (CST)

In an effort to help small businesses remain afloat, Congress has passed another COVID-19 relief package which allocates $310b to the Paycheck Protection Program (PPP).

The PPP ran dry last week after more than 1.6 million businesses across the country applied for relief loans. The Small Business Administration (SBA), the agency responsible for granting the loans under the PPP, has already approved more than $342 billion in loans since the pandemic hit.

Another crucial component of the bill is its inclusion of smaller, underbanked businesses. The new bill will designate $60 billion for smaller lending facilities, including “community financial institutions, small insured depository institutions and credit unions with assets less than $10 billion.”

This is great news for credit unions which will now have access to the funds they need to help their members who own small businesses.

So, what does this process look like? Here is a breakdown of events:

  1. The US Senate passed the new bill on Tuesday, April 21, 2020.
  2. The House passed the bill on Thursday, April 23, 2020.
  3. The President signed the emergency interim coronavirus relief package into law on Friday, April 24, 2020.
  4. Backlogged applications submitted to SBA’s processing system, E-Tran, prior to April 16, 2020 when they suspended accepting new applications.
  5. On Monday, April 27, SBA will re-open E-TRAN allowing lenders to submit applications on behalf of the applicants. 
  6. Financial Institutions will begin submitting applications to SBA’s E-TRAN system. Each lender’s application process and timelines will vary. At Tulsa FCU, our commercial team will be diligently working through the following status categories.
    1. 1st round – those applications that have been processed through initial underwriting and all required documentation is received.
    2. 2nd round – those applications currently in underwriting.
    3. 3rd round – those applications in queue for underwriting that have also submitted the necessary payroll documentation for their loan amount.
    4. 4th round – applications received after April 16, 2020.
  7. Once an application is submitted to the SBA’s ETRAN system, it will be processed and approved unless an error is identified. If there is an error, the application process may be delayed or potentially declined.

Expert Tip: Make sure you have provided your lender with the needed documentation for underwriting and SBA submission. This one simple task can make a major impact on how quickly your application can be processed and your loan funded.

If you did not provide this information with your application, prepare the following documentation and send to your lender.

  1. Driver’s License for all owners with 20%+ share in the business: A color copy of the front and back of a valid (unexpired) Driver’s License for each owner.
  2. Any documentation that can prove your payroll expenses. Acceptable Payroll Documents (listed in order of what seems to be the SBA’s preference):
    1. For businesses applying for a PPP Loan
      1. 941 Quarterly Tax Filings (2019, 2020 Q1)
      2. 944 Annual Tax Filings (2019)
      3. Payroll Register for the previous 12 months
      4. 12 months most recent bank statements
    2. For 1099 Independent Contractors or self-employed individuals applying for a PPP loan:
      1. IRS 1040 Schedule C
      2. 1099s (under which you were paid)
      3. Income and expense reports for 2019
    3. Don’t have any way to show payroll? Some lenders will accept the Business account’s bank statements as a last resort.