Monday, April 13, 2020 Stamford, CT USA — Problems with the application process for SBA loans have shaken companies’ confidence that the new Paycheck Protection Program will deliver the funding they need in time to survive the COVID-19 crisis.

As Congress continues its contentious debate over a second round of funding for the program, it should address feedback from companies that have already worked their way through the application process—or at least attempted to. A new Greenwich Associates survey of small businesses collected on April 7th and 8th reveals that:

  • As of April 8th, over 80% of businesses have registered for Paycheck Protection Loans. Given there are 30 million U.S. small businesses, approximately 24 million businesses have applied.
  • One-third of businesses applying rate the application process as ‘excellent’ or ‘very good’. Nearly 40% rate the application process as ‘poor’.
  • Over two-thirds of small businesses are not highly confident that the Paycheck Protection Program will deliver the needed financial relief. Of businesses that were contacted by their bank, 60% felt their bank was ‘helpful’ or ‘extremely helpful’.
  • Over 90% of small businesses think the Paycheck Protection Program can be improved, most notably by faster loan approval, better communications about which businesses qualify, and simpler application process.

What Message Do SBA Loan Applicants Have for Bank CEOs and the SBA?
The Greenwich Associates survey asked business owners to deliver the single most important message they would like to deliver to bank CEO’s and SBA administrators right now.

  • For bank CEO’s, the message from most business owners is that banks need to provide better communications and the ability to track loan status - “We need confirmation and feedback. Not even knowing if our application has been received and not having any way to check the status is maddening and leads to more duplicate applications, phone calls and emails. Even knowing where we are in the line would help.” 
  • Companies are also asking the SBA to improve loan tracking - “Give us a way to track our applications. I have two application numbers and no idea if they are lost, in the queue, or what the next steps are. Am I just supposed to wait until someone contacts me? That’s ridiculous.”

“The tracking of loan status is a major issue,” notes Greenwich Associates CEO Steve Busby. “Business owners are used to being able to get real time tracking status on a $10 purchase from Amazon, but are in the dark for online status for a million dollar loan.”

Metrics of Success
Of course, the ultimate measures of success for the SBA’s Paycheck Protection Program will be whether businesses receive the needed cash and how many jobs are saved. This will not be known for a while, but there are some interim metrics that the SBA, federal and state government officials, and the banks and credit unions should be paying attention to. These metrics include:

  • Number of businesses receiving sufficient funds
  • Timeliness of funds received
  • Satisfaction with the loan application and approval process
  • Satisfaction with principal participants (SBA, Banks and Credit Unions)

“Given the billions of dollars involved, there are some fundamental questions about the how the Paycheck Protection Program is working that should be asked,” says Steve Busby. “Foremost among these are how many qualified businesses are getting the money they need, and if that money be sufficient to save their business.”