“The current pandemic led to a quick response by the federal government in providing low-cost funding to small businesses. However, each bank processing the applications seemed to have different requirements on what backup data they required. The order in which applications were processed varied greatly.
This survey is to see a bit more scientifically what really happened and to see how we can learn from this experience should the promised second round of funding materialize. “
The results of our very unscientific survey are in. The answers are far from surprising based on what I am seeing in the media.
Almost 84% of respondents see the program as unfair. Many commented larger small businesses seemingly were given preference over the smaller applicants. Over 62% of respondents noted their bank never submitted their application. The balance of respondents was approved, most for the requested funding.
Several respondents commented on the confusion surrounding what backup data was needed. From my speaking to several bankers, they, too, were unclear. When they asked questions of the SBA, they got contradictory answers. In fairness, these bankers noted their SBA contacts, too, were presented contradictory information from their higher-ups. One banker noted they had to manually enter each application into the SBA system. Is that 1970 on the phone?
Respondents noted issues ranging from what could and could not be considered “payroll” to their bank’s online application system freezing to contradictory instructions on the additional backup data the bank required. Many noted that even the largest banks had issues with data submission.
In almost all cases where the loan was not fully funded or the loan was not processed, the applicant did not know why. Over 86% of respondents whose applications were not filed will apply again. Of these, about 29% will use a different bank. Some noted they were ‘stuck’ with applying with their bank because that was the SBA requirement. Others noted they applied through either a service or with a bank they never used before. Over half of approved loans were funded within a week.
Just under 2/3 of respondents noted the funding was very important or crucial to their business. A higher 95% saw the funding was very important or crucial to the economic recovery.