ATLANTA - Small businesses are the lifeblood of the economy. In the age of COVID-19, they are closing up shop at an alarming rate, but money promised through the federal Paycheck Protection Program has already been deposited into accounts.
According to the banking industry, more than $200 billion of the nearly $350 billion available to cover eight weeks of payroll has been loaned out.
Doug Williams CEO and president of Atlanta-based Atlantic Capital Bank said his team has already dispersed several hundred million of dollars through the Small Business Association, prioritizing businesses that are down to only a few days of cash left.
”Once the application is complete, we submit it to the SBA for authorization. We receive a loan number then we can supply our client with a closing documentation. There is an obligation by the SBA to disperse loan funds within 10 days receiving loan documentation,” he said.
Here are some of the rules for loan forgiveness over an eight-week period. Mr. Williams says 75 percent of expenses have to be payroll-related. You are eligible for loan forgiveness on payroll costs, interest on mortgage, rent and utility payments.
Now, this is a lot of money coming out fast with regulations, generally there to catch fraud, being dropped temporarily. There will be some fraud, but the bankers say this is just the cost of doing history-making business.
“The country needed to take this risk. The banking industry needed to take this risk to sustain the economy and prepare it for recovery. There are exigent circumstances that are unprecedented,” Mr. Williams added.
The best bet is to go to your long-time lending institution, but there are other options. To help the money move where it needs to be as quickly as possible, fintech services like Paypal, Intuit and Square have been approved to offer these coronavirus relief loans.
These loans are the key to keeping the economy afloat. Banks are the economic first responders.