Comments from the Lendio CEO
This is a thread from the founder and CEO of small business loan marketplace Lendio (apologies for the formatting):
Wow. What a mess! Just got off a conf call with the SBA. The @SBAgov & @USTreasury are having a power struggle and this is turning into a disaster. Millions of small businesses will be lining up for loans tomorrow, yet those 2 organizations are fighting about process & forms.
Treasury releases an app for the PPP loans and the ENTIRE country has been filling it out in preparation for tomorrow. Our engineers have been working for 48 hours straight to build an automated experience... and now, the SBA is saying that THAT application is not complete!
It's 12 hours before America's small businesses will be applying... and they STILL haven't released a new app for lenders. **There's no way this will be ready by tomorrow.** No one actually knows what's needed to actually document the application. There's been no updated guidance from the few documents they posted on Monday. At this point, there are WAY more questions than answers. Lenders are begging to get answers like: -does the bank have to be an SBA-licensed lender to participate? Or just an FDIC bank? -how does a lender apply to
approved as a PPP lender? On Monday, the guidance said to just send an email to apply, but SBA is saying that's not correct. The lender needs to complete a new expedited '750 application.' I asked when they would release the application (because many lenders are waiting response to the email they sent. SBA's answer: soon! -most lenders are worried they won't have enough capital to fund the demand, and are asking how quickly they will be 'reimbursed' on the loans so they can replenish capital. No answers yet. -while the low rate is..
exactly what the SMBs need, many lenders are opting out of the program because they can't make enough $ to even service the loans (0.5% per year is VERY skinny). -30m small businesses will be beating down the doors for capital tomorrow ... its a DISASTER waiting to happen.
BOTTOM LINE: the SBA & the Treasury need to quit the power struggle, get aligned, provide REAL guidance (for ALL lenders, business owners, and agents) so that... ... we can get much need capital into the hands of SMBs that are suffering right now!
This is being compared to the rollout of Obamacare.
The thing is, the demand for this program is going to be massive. Any company that's eligible is going to want to get this ASAP because the $350B is going to run out in very short order (barring operational problems). It's basically a cash giveaway.
h/t to Carl Quintanilla.
