Small Business relief drowning in the swamp


Cashmere Valley Bank, one of the largest regional banks in North Central Washington, has declined to participate in the Payroll Protection Program.
The big story last week was the small business relief program or Paycheck Protection Program (PPP). It’s a program touted to jump start our collapsed economy by helping small businesses get some immediate funding to keep people employed. 
The program started accepting applications April 3. At the rate this is going, the money won’t be disbursed to the small businesses that really need it before it is too late.
The problem is finding a bank that is processing the applications.
Locally, Cashmere Valley Bank is not accepting applications. 
North Cascades Bank has a link on their website for submitting an application although it is not clear if you must be a current bank customer in order for them to process the application.
Washington Federal Bank is accepting applications and according to their website they do not require the applicant be a current customer of the bank. They do not have an online link for submitting applications but do have a link to get a call back. Washington Federal has branches in Leavenworth, Wenatchee and Chelan.
Wheatland Bank in Chelan is participating, however you must be a customer to apply and they advise they are nearing capacity at the present time.
Coulee Dam Federal Credit Union is participating but their website does not appear to have a link on how to apply.
Umpqua Bank is participating however they are servicing their own customers before considering applications from other outside firms.
Forbes magazine reports that as of April 5, Wells Fargo is not accepting any more applications. All of the other national banks are only accepting applications from businesses that have a current active account with them.
NCW Media is contacting all local banks to assess their acceptance policy with regard to this program, but as of this writing it appears that finding a lender will put the program out of the reach of most of the small businesses that need the help.
There are some online companies that are taking applications. For example, Kabbage is accepting applications. Although Forbes reports they are forwarding the loan applications for those who qualify to their “partner lenders.” Many of these potential lenders are asking for information that is not required by the program. A clear sign that they are simply using this program to identify possible borrowers for their high interest working capital programs.
Here is what the SBA says is required:
The application form – SBA Form 2483 2 pages that require a signature and several places need initials.
Federal form 940 for 2019 – Shows the total payroll for last year, payroll register for 2019 and 1Q of 2020.
A schedule of any shareholder of the business that hold more than a 20 percent interest.
A schedule of any other payroll related costs that you are claiming as part of your payroll costs. In Washington state there is no state income tax but unemployment and workers compensation premiums could qualify. Any health insurance and retirement plan costs can be included.
Most lenders are asking for a copy of the applicant's driver’s license although it’s not clear this is required by the government.
Other lenders I have talked to ask for other information that is not required and is a red flag that they are more interested in getting the applications to sell the applicant other loan products that are not part of this program.
This is a highly touted measure to get the economy moving and protect small businesses from financial collapse. The problem is it looks like lenders, who are the most important link to making this work, are not really behind it. 
Time is of the essence in this program. It is intended to provide financial relief to small businesses and their employees. Unless the private sector banks can quickly process the applications and get the money into the local economy. Many local small businesses will shut down and unemployment claims will continue to soar.
Many small towns across the country only have one local bank. These communities are primarily served by small businesses that need this help. Without access to a qualified lender these small businesses cannot access the help they vitally need.

 

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