Friday morning April 3, 2020 was the moment that small business in America stood still. Business ceased because business owners and entrepreneurs were frantically hitting refresh on their bank’s website hoping to get their Payroll Protection Program (PPP) submitted before the Small Business Administration program ran out of funds. The first round of $360 billion was quickly depleted, and the second round of $310 billion is currently being processed.
PPP Loan Update
I’ve conducted a survey of 147 small businesses who have applied for the PPP. Though the sample size is not large enough to be statistically significant, the data sheds light on the application process.
First of all, the good news. Nearly half – forty-seven percent – of PPP loan applications have been approved as of May 4, 2020. That number is a significant increase from April 20, 2020 when only eighteen percent of PPP loans were approved.
There are likely two reasons for this uptick in approvals. First, the SBA has $310 billion in new money to allocate. Second, there was a great deal of confusion among the SBA, banks and applicants about how to process the loans. It took time to iron out the wrinkles in the process and now its much smoother.
The PPP Application Process Was a Total Disaster
Entrepreneurs had many comments on the PPP process that were not fit to print. The profound sentiment was frustration. The SBA rolled out this massive program incredibly quickly, which resulted in a process that left many small businesses exasperated, and asking questions.