Wealth Management

One of the big questions in the small business world right now is “where is my PPP loan”. The SBA announced last week that the program had run out of money. Yet, the large majority of small business report that they have not received funds, even those that have been “approved”.

COVID Loan Tracker was founded for exactly this purpose—to find out when money from the PPP program actually starts flowing. The SBA says around 1.7m loans were approved, accounting for only 6.6% of the 30,000,000 small businesses in the country. Yet of the $349 bn “approved”, only about 7% of companies say they have received any funds.

PLEASE HELP SMALL BUSINESS OWNERS BY FILLING OUT THE FORM

As of 7:00 am this morning here is our data on actual disbursements:

Total Applied: 13,428 companies
Total received money: 941 companies
Percent receiving money: 6.97%
Total Dollars received: $320,000,000
Median Employees per successful applicant: 15
Median Loan size: $320,000
Median Length to receive loan: 9 days

COVID Loan Tracker was started by small business owners Duncan and Rita MacDonald-Korth to help their fellow small business owners understand when PPP and EIDL advance money starts flowing. The site works by crowdsourcing knowledge on applications and loan disbursements. Our goal is to help the small business community and empower journalists with the data they need to keep the government accountable.

HELP US KEEP THE DATA FLOWING

COVID Loan Tracker, a union of over 17,000 small business owners representing billions of dollars in Paycheck Protection Program applications, demands that the federal government increase the funding for PPP to $1tn within 48 hours. 

SUPPORT OUR PETITION

The first round of the Paycheck Protection Program has proven that the initial conception of the distribution of funds was flawed from top to bottom. The program has done very little to help genuine small businesses and instead has benefited large companies who have used subsidiary entities to benefit disproportionately and unfairly. The examples abound. Banks have incentivized large and important customers—those who need PPP money least—at the expense of the backbone of the nation: genuine small business owners, or those who run “small” small businesses and are an intimate part of the communities they inhabit and serve. These are the people whom the program was designed to protect, and those whom have been most failed by it. 93.3% of US small business owners have received no money from the first phase of PPP, amounting to 28,000,000 businesses. This is a wrong that must urgently be made right.

In addition to increasing funding to $1 tn, we propose the following rules:

1. 50% of the total dollars funded through the program must go to businesses with 50 employees or less (with the employee count taken as of February 15th, 2020)
2. The next 25% of the total dollars funded through the program must go to businesses with less than 150 employees (with the employee count taken as of February 15th, 2020)
3. The next 25% of the total dollars funded through the program must go to businesses with less than 250 employees (with the employee count taken as of February 15th, 2020)
4. Businesses with less than 50 employees will have their applications processed first, with applications for funding larger businesses only being approved once the full 50% has been allocated to those businesses with less than 50 employees.
5. Any remaining funding that exists after these disbursements will be allocated to those businesses with less than 50 employees.
6. No entity with any ownership association to any business with more than 250 employees may be given funding.
7. Every lender which takes part in the Paycheck Protection Program must make every effort to process and disburse all loan applications within 14 days of application receipt. Those lenders which are found to be routinely in failure of this standard shall have their processing fees reduced by 50% at a minimum.

This plan will ensure that the small business owners who need this money most—the smallest of small business owners—will get the funding they deserve. These small businesses are the heart and soul of every village, town, and city in this nation. What will our country become if we fail them?

Please back our proposal and help genuine small business owners.

Duncan and Rita MacDonald-Korth
Small business owners and founders of COVID Loan Tracker

Small business owners around the country are scratching their heads amidst their broader panic about the news that the Paycheck Protection Program funding has run out. According to COVID Loan Tracker, which has tracked the applications of 15,000 small businesses totaling over $5 bn in PPP loans, only around 6% of companies have actually had loans deposited in their accounts. Many small businesses are wondering “where is the money?”, says COVID Loan Tracker co-founder Rita MacDonald-Korth.

PLEASE HELP SMALL BUSINESS OWNERS BY FILLING OUT THE SURVEY

COVID Loan Tracker was started by small business owners Duncan and Rita MacDonald-Korth to help their fellow small business owners understand when PPP and EIDL advance money starts flowing. The site works by crowdsourcing knowledge on applications and loan disbursements. Our goal is to help the small business community and empower journalists with the data they need to keep the government accountable.

The two founders of the site report that they have had extensive communication with banks and lenders over the last ten days and the huge difference between “approved” loans and disbursed loans can be accounted for by the behavior of borrowers, the banks, and the SBA.

“The speed with which the PPP program was designed led to inherent flaws and misaligned interests that have caused huge bottlenecks in deploying funds to small businesses”, says Duncan MacDonald-Korth. According to MacDonald-Korth, the problem is that the poor initial guidelines for banks and the “first come first serve” nature of the program, made borrowers apply to many banks/lenders at once. Because of that “there was double to triple the volume of applications as actual businesses applying”. This caused an apparent cascade of issues.

Firstly, it compelled banks to submit applications to the SBA for approval before they were actually complete. Because banks get paid a 1-5% fee for processing the loan, they want to make sure they process it and not a competitor. Accordingly, with so many duplicate applications, it made sense for the banks to urgently submit applications to the SBA—in order to win approval versus other lenders—even if all the paperwork was not in order. The SBA, in turn, had to make sure it was not approving duplicate applications, so it had double check each application flowing in, slowing down the process. All of this leads to the situation we have today—money entirely exhausted, but the vast majority of it not paid out because banks are still getting the proper paperwork from borrowers.

PLEASE HELP KEEP THE DATA FLOWING

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