Why do you think the banks are doing this? Just to be punitive. The fact that banks don’t want these tells the story, don’t you think?
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Then there's this: https://www.kabbage.com/paycheck-pro...program-loans/
I believe the policies like B of A requiring a previous loan/BizCC, is because they are then funding a loan that will keep their clients in business, so THEY GET PAID BACK on the previous loan or cc.
what story? its the governments money who they are getting from you the taxpayer to grant to small business owners to keep businesses float so the economy doesnt hit a total depression the likes of which it will take a very long time to recover,, oh and get a small fee for doing so
They are def not a lead gen company
The. Banks. Don’t. Want. To. Participate.
Why? Do you think banks are in the business or turning down the profits? No. And stop with this whole “it takes minimal amount of manpower” aspect. It is the bank who also has to deal with the forgiveness aspect on the backend. That will take considerable amount of manpower (which costs the bank money).
Try this: call 10 banks and ask them if you can send them referrals for PPP and you want nothing in return. 10 out of 10 will tell you they aren’t interested. Then ask yourself, if this is worth it for them, why are they turning away referrals.
Let me tell you, I’ve been brokering for 15 years. The majority of the stuff I broker is conventional and SBA loans. I have contacts with just about every conventional/SBA lender there is. We have contacted all of them in the past weeks preparing for this. I literally have just a handful that are accepting my referrals on this.
**Update**
Just after I posted above I literally just got word from one of the few that were accepting outside clients saying that Crestmark Bank has just opted out of the program due to “final program guidance”.
They do gift certificates now, too:
“Kabbage is now trying to position itself as a middleman that will connect people with loans from the Small Business Administration. It has also started a website to help small businesses sell gift certificates to consumers.”
https://www.bloomberg.com/news/artic...sh-needs-mount
Chris - you seem to think this is a good situation for brokers. I disagree and so do a few others on this forum.
Come back to us in 2 weeks and inform us of your experience.
For myself, I will stay with the SBA 7(a) - with lower interest rates, there is an opportunity for business
owners to purchase or possible refinance their commercial property.
The landscape has changed and will remain changed for quite some time at least regarding the MCA Industry.
banks are being greedy when business owners need them. they want to turn a profit sure, but they wont be able to lend money if all their clients go out of business.
And yes, we have all heard not many banks are taking broker apps or paying fees, still today is the first day... stay tuned
i dont think its a Good situation, i think its deals to do, minimal work and helping create and build relationships with many.
by the way lots of banks have stopped processing regular 7a loans so good luck with that, since they can also get a deferment on their current SBA loans.
Hello Mike,
The latest news is that there is an issue with the agreement between banks and the government regarding the buy-back provision that the government was supposed to perform. Under the initial loan program, the PPP loan was 100% guaranteed by the government, and a 100% guarantee to buy the loan back from the bank after the 4 month forgiveness period ended. However, last night’s rule changed that dynamic, eluding that the banks may not be able to sell the loans back to the government at a 100% commitment as soon as the forgiveness period arrives. The banking industry is working with the gov’t right now to resolve the issue and hope to have direction shortly.
Additionally, it appears that there may be a 3rd revision to the application.
As a result of the above items it seems prudent to hold off sending out the information needed to submit an application and the portal link, as it is highly likely whatever we would send now most likely will change yet again.
Ok, so it’s clear you don’t even know what you’re talking about. These are banks using their own money, who then have to petition the Treasury for reimbursement (which will take 60-90 days) if the lender deems the borrower eligible for loan forgiveness.
It’s the bank using its own capital, but just given a 0% risk-weight.
So is Kabbage going to be dispersing these PPP funds? Are they becoming an SBA Lender? Seems like their automated underwriting process would make much more sense for something like this.
Yeah the NAELB just emailed this update out. About the dispute on buy backs and 3rd revised application to come.
Greedy? So the banks are supposed to hand out loans barely over prime rate, with super low reimbursement fees for underwriting, with no real guarantee the govt will reimburse the banks at 100% as originally promised, while diverting manpower to process these loans, and using capital they normally lend at much more sustainable rates?
All while we enter a financial crisis where they will face their own capital requirement tightening. And then they have to use even more resources on the backend to verify the borrower’s books and paperwork to provide the required forgiveness, to wait 60-90 days to be reimbursed from treasury?
Oh yeah, and the bank can’t even collect any payments for a year.
"The latest news is that there is an issue with the agreement between banks and the government regarding the buy-back provision that the government was supposed to perform. Under the initial loan program, the PPP loan was 100% guaranteed by the government, and a 100% guarantee to buy the loan back from the bank after the 4 month forgiveness period ended. However, last night’s rule changed that dynamic, eluding that the banks may not be able to sell the loans back to the government at a 100% commitment as soon as the forgiveness period arrives. The banking industry is working with the gov’t right now to resolve the issue and hope to have direction shortly.
Additionally, it appears that there may be a 3rd revision to the application. "
The latest new that directly and immediately affect the merchants in Dallas Texas (which I am in) is that the county judge has just extended shelter in place until May 20th!
So now it's not a if I will be closed for 3 months, it is a yes I will be closed for at least 3 months, and now the maybe shifts to 6 months!! WTF!
https://www.wfaa.com/article/news/he...2-06dd2ac783b6
So who evaluates if a business should take the money? All money ain't good money...
Some merchants may not think through the fact that just cause they are open for business, doesn't mean there customer are immediately coming back.
So will you guys be telling your applicants to think through these things, and applying for, and getting money may not be the best thing to do.
I would like to speak with you regarding the number of loans you mentioned being processed. I am with MoneyThumb and we automatically convert PDF statements for loan processing and underwriting. They are done completely in a matter of seconds with full reconciliation and score cards. Is this something we can talk about?
Don Campbell
don@moneythumb.com
858-215-5862
??
The deferment is up to 1 year. Yes, we ****ing know what they are underwriting.
Seriously, the fact that you have continuously argued that the lenders aren’t originating with their own capital, but think it’s the treasury originating the loans, tells us you have no ****ing clue how this works. Yet you’re so adamant that this is such a good deal for lenders. That somehow you know something they don’t know.
Let people who navigate SBA lending on a daily basis discuss this. Stick to writing reviews about people in the MCA space.
And tell us, which lenders aren’t doing 7(a)s as you claim? Have you ever done an SBA loan before?
im not sure you can read, but i never said the lenders arent using their own capital at first. So wheres the 350 billion going buddy??
Tell us then what the banks are underwriting besides the application?? what docs are they asking for?
Well we know SmartBiz is not doing 7a and many of their banks
Ifs a mess like most figured
Just talked to my contact at Lendio (I used to work there) and they are shifting all their efforts towards the PPP. Apparently they were approached by a large corporation that owns a network of banks (I thought he said Henry Jackson, but I could be wrong) because their banks don't have online portals capable of handling the volume. He said there were currently 1000 calls on hold in their phone queue waiting to apply. He isn't certain how they are going to get paid/reimbursed, but probably will only be a $50-$100 per application.
SmartBiz. isn’t. a. ****ing. lender.
They don’t LEND ANY SBA PROGRAM. So, again, you said “many banks have stopped lending 7(a)s”. Name them. You can’t.
As far as docs theyre asking for, all you’re showing is that you truly have no ****ing clue what’s going on. The documents required, most banks, along with Treasury, along with many states, have released the standard lists of documents required. Literally everyone else in this forum is familiar with the lists.
As for the $350B, that is going toward PURCHASING the loans from the banks who are tying up their own funds in originating, as well as paying the banks back after the loans have forgiven.
Like I said, you have no clue what you’re talking about, but you think just making up random **** as you go along will suffice. It won’t.
anger issues bud, we all know smart biz isnt a lender
Literally have had the main SBA document list since last week for stips but not all is equal.
Here is the guidance to banks:
"What underwriting is required? You will need to verify that a borrower was in operation on February 15, 2020. You will need to verify that a borrower had employees for whom the borrower paid salaries and payroll taxes. You will need to verify the dollar amount of average monthly payroll costs. You will need to follow applicable Bank Secrecy Act requirements."
Here is what 1 bank has on their site:"
State income, payroll, and unemployment insurance filings
TAX ID/EIN and complete ownership information
For sole proprietorships, independent contractors, and other self-employed individuals, your 1099-MISC forms
For sole proprietorships, documentation of the income and expenses from the sole proprietorship. For healthcare costs, all health insurance premiums paid by the business owner under a group health plan
Your company retirement plan funding paid for by the company
Additional documents may be needed.
"
But yea, no clue Bret
Okay which one of you is this, gave me a good laugh:
https://www.covidbusinessfunding.com/
1) You made the claim that many SBA lenders stopped funding 7(a)s and have yet to name a single one.
2) You asked what the lenders are underwriting besides the application, and then admit that they are asking for other documents besides an application.
Your argument is literally an argument against yourself. Stick to trying to sell ISO lists and let people who actually navigate SBA financing discuss the SBA programs, as you’ve never actually brokered an SBA loan yourself.
On a side note, US Bank and Wells released their application portals this AM.
Bank of America Changes Paycheck Protection Program Rules After Criticism.
Bank of America ended up changing its position with Chief Executive Brian Moynihan telling CNBC Friday that applicants no longer needed an existing lending relationship with the bank to access the funds.*
Bank of America says that it has already received 60,000 applications with paycheck protection program loan requests totaling over $6 billion.
Meanwhile the U.S. Small Business Administration said that 5,218 loans valued at more than $1.8 billion had been received.
https://www.thestreet.com/investing/...fter-criticism
As many of you likely know, SmartBiz notified their ISOs that all applications in their 7a portal would be processed as PPPs. A few days after that they sent guidance that their funding banks are servicing their existing clients first and they really don't know when (if?) they will get around to funding smartbiz clients. My problem is that I have sent 45 clients to them since Thursday. Does anyone have a source we could cobroker thru to cherry pick the best of my 45 clients? These deals are fresh and I feel like if I wait for Smartbiz, they will go elsewhere.
lots of apps, not a alot of fundings going on. there are still many things being worked out behind the scenes. it's almost as though this program was a rough draft, and, now it's being ironed out. also, each bank will hit capacity at some point. the way i understand it is, the SBA lenders (depository banks) have to carry these loans on their balance sheets at 1% with customers who aren't even open and operating. it sounds like that is being worked out as well. the non depository companies (fintechs) are going to have a diff application. however, i think the main question here is how to get paid for PPPs and the answer is, many will not be paying to process apps.
i also believe the companies with massive databases will direct market PPP's now and the broker will be left without any opportunities for it.