[Winning]

Add me to the list!

I submitted for PPP and the EIDL.. Figure I would go ahead and get in line and see what comes, and once the offers/approvals are in front of me decide if I will take them or not... I am not expecting anything any time soon , if ever from these 2 programs.. I have no confidence in this process, but I am interested to go through it so I can learn more about it. I actually have more confidence in Paypal doing something for me way faster and not "too" expensive.

[WestCoastFunding]

Add me to the list!

I submitted for PPP and the EIDL.. Figure I would go ahead and get in line and see what comes, and once the offers/approvals are in front of me decide if I will take them or not... I am not expecting anything any time soon , if ever from these 2 programs.. I have no confidence in this process, but I am interested to go through it so I can learn more about it. I actually have more confidence in Paypal doing something for me way faster and not "too" expensive.

I’ve had clients get amazing offers from EIDL but they started the first day and they won’t see funds for another month (both offered $500k over 30 years at 3.75% with ability to get up to $2,000,000). The 500k can be done in 4 weeks or they could opt for $2,000,000 in 7 weeks. One was extremely profitable, the other is slightly profitable (but after some revisions will probably file returns with small net losses in 2019). Because of that they’ll probably go with the $500K in 4 weeks. But that’s about it for the EIDL. Seen hundreds still waiting for response.

[WestCoastFunding]

This is reality:

https://www.cnbc.com/2020/04/06/stam...ding-cash.html

[Christian]

So Kabbage is accepting applications, but cannot yet fund. Anyone have any insight on what they are doing with those apps?

[StealMyDeal]

I’ve had clients get amazing offers from EIDL but they started the first day and they won’t see funds for another month (both offered $500k over 30 years at 3.75% with ability to get up to $2,000,000). The 500k can be done in 4 weeks or they could opt for $2,000,000 in 7 weeks. One was extremely profitable, the other is slightly profitable (but after some revisions will probably file returns with small net losses in 2019). Because of that they’ll probably go with the $500K in 4 weeks. But that’s about it for the EIDL. Seen hundreds still waiting for response.

Hey West, if a business submits the EIDL application directly through the SBA website, who processes that loan application? The SBA itself? When and how is the business notified of the results or any updates? We submitted several last week and haven't seen anything yet.

[cmarks]

I believe commissions will be paid perhaps 1%. Right now you have brokers taking half of the 1% giving us .50%
In the coming day,weeks you'll see many Fintech loan companies, Ondeck and alike having this.
Right now we just have to hold tight and get what we can with the current system (brokers) until the direct lenders start carrying it. It will happen.
Money dried up for MCA term loans for the retail/restaurants and investors are making 0% Why wouldn't they opt-in to make a 1-2% off of the 5%

Yeah 1% of $100,000 loan is $1,000 vs MCA $8,000 - $15,000 it will take you many more loans to get to that amount, more loans to process which wont be a problem to signup.

Their will be lots of opportunity to make great income.

Yep the lenders wanting to get involved are doing so for a few reasons.
So in the IFRN Final doc for the program thats been out for a few days, this is the section(pg.11) with question and answer provides a good look at the govts view on rates and costs for banks:
"
What is the interest rate on a PPP loan?

The interest rate will be 100 basis points or one percent. The Administrator, in consultation with the Secretary, determined that a one percent interest rate is appropriate.

First, it provides low cost funds to borrowers to meet eligible payroll costs and other eligible expenses during this temporary period of economic dislocation caused by the coronavirus.

Second, for lenders, the 100 basis points offers an attractive interest rate relative to the cost of funding for comparable maturities. For example, the FDIC’s weekly national average rate 12 for a 24-month CD deposit product for the week of March 30, 2020 is 42 basis points for non-jumbo and 44 basis points for jumbo (https://www.fdic.gov/regulations/resources/rates/).

Third, the interest rate is higher than the yield on Treasury securities of comparable maturity. For example,
the yield on the Treasury two-year note is approximately 23 basis points. This higher yield combined with the fact that the loans are 100 percent guaranteed by the SBA and the fact that lenders will receive a substantial processing fee from the SBA provide ample inducement for lenders to participate in the PPP.
"

[Hedley Lamarr]

Yep the lenders wanting to get involved are doing so for a few reasons.
So in the IFRN Final doc for the program thats been out for a few days, this is the section(pg.11) with question and answer provides a good look at the govts view on rates and costs for banks:
"
What is the interest rate on a PPP loan?

The interest rate will be 100 basis points or one percent. The Administrator, in consultation with the Secretary, determined that a one percent interest rate is appropriate.

First, it provides low cost funds to borrowers to meet eligible payroll costs and other eligible expenses during this temporary period of economic dislocation caused by the coronavirus.

Second, for lenders, the 100 basis points offers an attractive interest rate relative to the cost of funding for comparable maturities. For example, the FDIC’s weekly national average rate 12 for a 24-month CD deposit product for the week of March 30, 2020 is 42 basis points for non-jumbo and 44 basis points for jumbo (https://www.fdic.gov/regulations/resources/rates/).

Third, the interest rate is higher than the yield on Treasury securities of comparable maturity. For example,
the yield on the Treasury two-year note is approximately 23 basis points. This higher yield combined with the fact that the loans are 100 percent guaranteed by the SBA and the fact that lenders will receive a substantial processing fee from the SBA provide ample inducement for lenders to participate in the PPP.
"

Sure.... Banks want to process hundreds of thousands of smaller loans that may or may not ever get paid back and are questionably guaranteed by the SBA .....all for 1%. That's much easier than laying out traditional LOCs or ABLs at Prime +1.

[abfunders]

Sure.... Banks want to process hundreds of thousands of smaller loans that may or may not ever get paid back and are questionably guaranteed by the SBA .....all for 1%. That's much easier than laying out traditional LOCs or ABLs at Prime +1.

I haven't weighed in at all, I'm focusing on a ton of other angles right now (real estate, PO financing, payment solutions for cannabis). However, I think Kevin just summed up what everyone's been saying for the past week plus.

On that note, a happy Passover for everyone out there. Stay safe. #stayathome

[WestCoastFunding]

Sure.... Banks want to process hundreds of thousands of smaller loans that may or may not ever get paid back and are questionably guaranteed by the SBA .....all for 1%. That's much easier than laying out traditional LOCs or ABLs at Prime +1.

Chris is literally the only person that thinks this is attractive to lenders, yet the fact the lenders refuse to touch these other than to their own clients (nearly all will only do It to protect their own exposure by financing clients that have credit facilities to the banks) tells the story.

Why in the world would the banks want to sink their money into a program like this? They won’t. The Federal Reserves know this program is dog**** to lenders, so they are now creating their own credit facilities to provide financing to the PPP borrowers directly, while using the banks to process the loans.

[Michael I]

https://finance.yahoo.com/news/night...132110725.html

[WestCoastFunding]

https://finance.yahoo.com/news/night...132110725.html

This should work now that the Fed may get involved but still won’t be up and running for days. Overall the program is a nightmare. It wouldn’t shock me if we found out not a single dollar was given to PPP applicants yesterday.

[Michael I]

This should work now that the Fed may get involved but still won’t be up and running for days. Overall the program is a nightmare. It wouldn’t shock me if we found out not a single dollar was given to PPP applicants yesterday.

but also all banks already at capacity .Even for myself i am rethinking if i applied with the correct bank or my app will be in limbo forever

[cmarks]

Chris is literally the only person that thinks this is attractive to lenders, yet the fact the lenders refuse to touch these other than to their own clients (nearly all will only do It to protect their own exposure by financing clients that have credit facilities to the banks).

Why in the world would the banks want to sink their money into a program like this? They won’t. The Federal Reserves know this program is dog**** to lenders, so they are now creating their own credit facilities to provide financing to the PPP borrowers directly, while using the banks to process the loans.

LOL,, I simply copied and pasted what it says in the docs...thats it. Thats the govt telling you what they think, so theres someone else... None of this is without flaws.
There are reports of businesses who have received money form PPP, and others said that wouldnt happen until June, i said this week. So go figure...

Also there are banks and fintechs applying to join, reasons are multiple, but you know everything with your vast experience of SBA lending that does little to anyone for a brand new emergency loan product that the banks barely know how it works.

[WestCoastFunding]

https://finance.yahoo.com/news/night...132110725.html

“President Trump highlighted the PPP in his coronavirus task force press conference on Monday evening: “It's really been performing well,” he said. “A couple of little glitches. Minor glitches that have already been taken care of.” He did add that the administration will likely have to add more money to the PPP package.“

Smh. “A couple little glitches”

[Hedley Lamarr]

LOL,, I simply copied and pasted what it says in the docs...thats it. Thats the govt telling you what they think, so theres someone else... None of this is without flaws.
There are reports of businesses who have received money form PPP, and others said that wouldnt happen until June, i said this week. So go figure...

Also there are banks and fintechs applying to join, reasons are multiple, but you know everything with your vast experience of SBA lending that does little to anyone for a brand new emergency loan product that the banks barely know how it works.

Chris,

The only reason a non-participating bank or fintech would apply to be a participant is a customer grab. They think that they can grab depository relationships from other banks that were either overwhelmed with PPP or refused the client for one reason or another. It's a great thought, but they are NOT going to make any money on this product alone and are bottom feeding. There might be other reasons for non-banks to apply for participation or act as a broker.....to grab information from the customers needing PPP for other purposes. All eyes are on this program. If anyone does anything nefarious they will go down hard and fast.

I have been saying for weeks...... If you think you are going to make any money off these programs as a lender, agent, or broker.....you are wasting your time. Time is better served trying to help clients in other ways.

KH

[WestCoastFunding]

Chris,

The only reason a non-participating bank or fintech would apply to be a participant is a customer grab. They think that they can grab depository relationships from other banks that were either overwhelmed with PPP or refused the client for one reason or another. It's a great thought, but they are NOT going to make any money on this product alone and are bottom feeding. There might be other reasons for non-banks to apply for participation or act as a broker.....to grab information from the customers needing PPP for other purposes. All eyes are on this program. If anyone does anything nefarious they will go down hard and fast.

I have been saying for weeks...... If you think you are going to make any money off these programs as a lender, agent, or broker.....you are wasting your time. Time is better served trying to help clients in other ways.

KH

This is 100% absolutely right.

[fundingsmbs]

there is noway anyone is doing this in our space for free. i saw one major marketplace company post they were hiring 200 temps. that would not be done if there wasn't a financial incentive. it absolutely is a customer grab opportunity which there is nothing wrong with that aspect of it.

[Hedley Lamarr]

there is noway anyone is doing this in our space for free. i saw one major marketplace company post they were hiring 200 temps. that would not be done if there wasn't a financial incentive. it absolutely is a customer grab opportunity which there is nothing wrong with that aspect of it.

All eyes are watching this process. If anyone is stepping into this business as an information grab and not actually helping the client with the program intended, they will go down very hard and very fast. A lot of agencies have been tasked to watch this process and everything related to the process.

[Fly]

What agencies?

[Hedley Lamarr]

What agencies?

Do something stupid and you will quickly find out.

[Winning]

Based on what I have personally experienced with PayPal vs other lending institutions, I feel as if PayPal should get involved with this. I think they have the know how to make the process efficient and as painless as it can be.. As a merchant,I have never dealt with a better lending company. They were the cheapest, fastest, and have provided excellent support. I would think they could do the same with the PPP system.

[Hedley Lamarr]

Based on what I have personally experienced with PayPal vs other lending institutions, I feel as if PayPal should get involved with this. I think they have the know how to make the process efficient and as painless as it can be.. As a merchant,I have never dealt with a better lending company. They were the cheapest, fastest, and have provided excellent support. I would think they could do the same with the PPP system.

They are not set up for it an neither are a lot of fintech companies. First and foremost, you need depository capabilities which most fintech companies do not have. They would have to partner with a bank that does.....

[Winning]

They are not set up for it an neither are a lot of fintech companies. First and foremost, you need depository capabilities which most fintech companies do not have. They would have to partner with a bank that does.....

Is it possible for any of that to change?

A month ago there was no unemployment insurance for 1099'ers, now there is. IJS...

[WestCoastFunding]

Based on what I have personally experienced with PayPal vs other lending institutions, I feel as if PayPal should get involved with this. I think they have the know how to make the process efficient and as painless as it can be.. As a merchant,I have never dealt with a better lending company. They were the cheapest, fastest, and have provided excellent support. I would think they could do the same with the PPP system.

PayPal will absolutely end up doing these.

[Hedley Lamarr]

PayPal will absolutely end up doing these.

They need to establish a depository capability and it's not that easy. Since funds are "backed" by the Feds, they will also need to make sure compliance is super tight. Hence the reason it is easier for the banks to do this or act as agent.

Some fintechs might have a great front end to help process, but getting someone to partner with right now is close to impossible.

And let's not forget..... the juice is not worth the squeeze.