The recent blog post provides an update on the Coronavirus Relief Bill and the awaited PPP2 updates. It highlights that while the bill has been passed, the necessary guidance from the Treasury and SBA for implementing the programs, including new PPP loans and modifications to the forgiveness process, has not yet been issued. The post also draws attention to the fact that lending institutions will decide their participation and unique requirements once the guidance is received. Furthermore, the post shares concerns about potential fraud in the PPP funding and the EIDL program, urging borrowers to wait for guidance from DC and local lenders before proceeding.
Coronavirus Relief Bill Updates
Now that the Coronavirus Relief Bill has been passed and signed, the news is rife with “analysis” and commentary and prognostication which is leading to the raising of expectations on the part of potential borrowers. However, as of today we still do not have the necessary guidance from the Treasury and SBA for these programs to be put into motion. The language of the bill gives them ten days to develop the necessary policies and procedures governing new PPP loans, modifications to the forgiveness process and EIDL program (including the re-opening of the “first advance”). Given what is understood at this time concerning some of the shifts in the focus for these programs, changes in the guidance are anticipated to be significant.
Lending Institutions Participation
Also keep in mind that once this guidance is received, lending institutions will then review and decide on whether they will participate, and if so, what unique requirements they may impose. Already there are articles appearing in the press stating that some lending institutions are suffering from PPP fatigue and may decide to opt out participating. We will be re-polling financial institutions in our market to see if they will or will not participate and, if they do decide to do so, under what conditions. It is recommended that the network may want to contact lenders in their markets to determine their interest in participating in PPP2.
Fraud Concerns
In a related issue concerning the amount of fraud apparent in the first rounds of PPP funding and the EIDL program, here is a link to an article published in Entrepreneur, which is a cautionary tale of what happens when a borrower tried to defraud the system following 9/11.
Final Thoughts
Right now, the bottom line message is to stand fast and wait for guidance from both DC and local lenders. Please reassure them that once any relevant and actionable information is received we will immediately pass it along.
Question & Answer
What updates are provided in the recent blog post regarding the Coronavirus Relief Bill?
The recent blog post provides an update on the Coronavirus Relief Bill and the awaited PPP2 updates. It highlights that while the bill has been passed, the necessary guidance from the Treasury and SBA for implementing the programs, including new PPP loans and modifications to the forgiveness process, has not yet been issued.
How will lending institutions decide their participation in the Coronavirus Relief Bill programs?
Once the guidance is received, lending institutions will review and decide on whether they will participate, and if so, what unique requirements they may impose. Some institutions may suffer from PPP fatigue and opt out of participating.
What are the concerns regarding potential fraud in the PPP funding and EIDL program?
There are concerns about potential fraud in the PPP funding and the EIDL program. Borrowers are urged to wait for guidance from DC and local lenders before proceeding to prevent fraudulent activities.
