The Senate passed additional coronavirus relief Tuesday (April 21) in the form of legislation that would add $370 billion in small business relief loans. The bill would also set aside $75 billion for hospitals and healthcare providers, plus an additional $25 billion toward COVID-19 testing efforts.
This legislation, expected to pass the House of Representatives on Thursday before heading to President Trump’s desk for approval, injects necessary funds to the Small Business Administration’s (SBA) already depleted Paycheck Protection Program (PPP).
Previous coronavirus relief, which set aside $349 billion in forgivable loans to the program designed to keep workers on payroll throughout this pandemic, ran out last Thursday after just 13 days of applications.
Following this sudden exhaustion of funds, thousands of small businesses found themselves in the dark about their loan application status, with many receiving no response as to whether their previously submitted proposals had been approved.
As such, small businesses that previously applied for PPP loans now have a second chance to obtain some much-needed government relief as the coronavirus pandemic nears the end of its second month.
Coronavirus Relief for Small Businesses
If you previously applied for COVID-related relief, but received only radio silence from the SBA, your first step in getting a loan this round should revolve around building strong communication between you and your bank.
Building a Relationship With Your Bank
“A company should have a solid relationship with their banker during this time — it’s like knowing your doctor,” says Bill Kroll, former executive vice president of the American Bankers Association. “If a small business is working with a bank where they’re well known to management, they can get assistance with the application, and provided the bank is an SBA-approved lender, they’ll have recourse.”
“If I had a small business and had been turned down the first time, I’d be on the phone with senior people at my bank, figuring out who I should be talking to, and make my case vocally,” Kroll adds. “I think those companies will be left out if they don’t make that effort.”
Maintaining and strengthening the relationship with your financial institution is echoed by professionals in the entrepreneurial sphere, even if your previous communication with your banker was somewhat limited.
“While the SBA are the ones providing the money, these loans are still being made through the banks,” says business coach and CentSai columnist Belinda DiGiambattista. “Banks are, by and large, issuing loans to their existing customers, and have policies that may prevent them from issuing them to new clients.”
But even entrepreneurs and business owners lacking previous direct correspondence with their bank can make inroads, increasing their chances of receiving a PPP loan in the future.
The Benefits of Smaller Banks in Getting Coronavirus Relief
“If you’re getting nowhere, you may be banking with a larger bank, and they’re going to prioritize their larger clients,” DiGiambattista adds. “In that case, I would recommend turning to a smaller bank — even if you have no luck, you’ll have built a professional connection, which can benefit you down the line for future government loans and general access to banking products.”
Building this relationship between your enterprise and your financial institution can pay dividends in your ability to receive a PPP loan — both now and throughout this likely lengthy pandemic.