[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.
"

[Kevin Henry-Seacoast]

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.

[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.

[Kevin Henry-Seacoast]

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.