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One business owner’s experience: Applying for Paycheck Protection Program funds

Managing MoneyLeadership

23 min read

Just like so many of you, my company’s been hit hard by the coronavirus crisis. Since the end of February, I’ve woken up every morning relieved that today wasn’t the day I had to ask our Team to take a pay cut. Layoffs have been out of the question except as the last possible resort—and I’m just glad we haven’t reached that point. Our Team is a blessing: creative, productive, engaged, open and kind. I’m very lucky to get to work with them.

And I can feel our Team’s gratitude. Some of their spouses and many of their friends haven’t been so fortunate.

I’ve been through this before. In February 2009, the recession hit and—within one month—25% of our small business clients left in a panic. In order to survive and rebuild, we all took a pay cut. It was painful. The memory of that lingers in me. Looking back, particularly with the perspective of our current situation, I feel how much more traumatic it was than I’ve ever allowed myself to appreciate.

This time it’s a little different—and I’m different. My leadership team and I have made smarter business decisions in the years since. We’ve grown the company by almost 30% in the last year. We’ve managed our cash and investments more carefully. We’re in a better position to weather this storm than we were the last time.

Which is not to say we’re having an easy time of it. Not by any stretch. We’ve for sure experienced losses, with more inevitably to come. It’s a hard pill to swallow.

Getting the first glimpses of the CARES bill and the Paycheck Protection Program (PPP) at the end of March gave me some comfort. The prospect of receiving an influx of cash—most or all of which we wouldn’t have to pay back—made a huge difference both in how I was assessing our situation and in the likelihood that we would have to reduce our costs at our Team’s expense. 

Deciding to apply for these funds was easy. Everything that’s come after that decision hasn’t been.

I can imagine the chaos the Small Business Association (SBA) and the PPP lending banks have been in, trying to accommodate the onslaught of applications—and I’ve been caught in the stream of that chaos. So in the spirit of unity with my fellow business owners, I want to share my experience with you through the timeline of our application process. If you haven’t applied yet, I hope our journey gives you an idea of what to expect. And if you have, I hope you find some comfort that you’re not alone. I’ll add onto this log weekly, so check back for updates.

Week One

Week Two

Week Three

Week Four

Week Five

 

Thursday, April 2

Early today, I learned that PPP applications would be available tomorrow, April 3. And according to the news, business owners who get their application in tomorrow will be funded by the following week. I want to make that happen. 

Now at the end of the day, our bank (one of the biggest) announced a delay, making it impossible for us to apply tomorrow. My first disappointment. My Director of Finance and I agreed to complete the application by tomorrow afternoon anyway, even if we couldn’t submit it. So we’re ready.

Friday, April 3

Today we got a notification from our bank: They were taking applications. I was overjoyed. My Director of Finance and I met virtually this afternoon to fill out the application on the bank’s website. It was pretty simple and straightforward. I had to: 

  • Calculate our average payroll minus any costs over $100,000 a year (for any employees who make more than that) and multiply that number by 2.5 to determine the size of the loan we’re eligible for.
  • List the number of employees we have and the purpose of the loan. 
  • Answer eight simple, yes-or-no questions about any criminal, bankruptcy or SBA loan history.
  • Certify “in good faith” eight statements related to my need for the loan, how I would use the money and the accuracy of the information I provided.

In one of the eight statements, it became clear that if I want the loan to turn into a grant that we won’t need to pay back, 75% of the funds must be spent on payroll costs. No problem. I intend to spend all of the loan proceeds on keeping our Team employed at their current salary, so I was happy to certify that and felt good that this very condition would qualify us for loan forgiveness.

I pressed the submit button and was taken to the next page that thanked us for our request and then made it clear that our application hadn’t actually been submitted. I now needed to wait for a bank representative to contact me to complete the application process. Next disappointment. In less than an hour, though, my banker called to confirm that he received our “request,” that the bank’s systems had crashed from the overload, and that he’d call me back over the weekend to complete the application process manually. I could feel the stress in his voice from the volume of requests, the demands on the bank’s systems and the position he’d suddenly found himself in. I was delighted that he’d taken the time to reach out and assure me that we’d get this done before Monday.

Saturday, April 4, and Sunday, April 5

I’ve waited all weekend for our banker to call. I haven’t gone anywhere anyway under our governor’s “Stay Home, Save Lives” order, except to take my daily walk with my husband to the lake near our house, with my cell phone in my pocket. My banker hasn’t called. I’m deflated.

Monday, April 6

I’ve had a very busy day. Lots of meetings via Zoom. About the time I realized I forgot to call my banker to get the application process back on track, my Director of Finance forwarded me a mass email from our bank, asking all the customers trying to submit PPP applications to “sit tight.” Okay, I thought, I’ll do that. They must be working overtime to fix the problem. They must be sparing no expense. They must know how important this is.

Tuesday, April 7

At 2:41pm, I received another mass email from my banker. It read, “We have just been informed that the original online application that was planned for Friday the 3rd is up and running.” Hallelujah! The email went on to say (with underlines): “Best practice: Close out of all of your browsers, update and clear cookies if getting error messages.” 

With new-found hope, I followed their instructions and tried to get in. So did my Director of Finance. We both tried several times and got the same error message in red: You can’t use this digital application at this time. Still hoping that our persistence would pay off, my Director of Finance sent me all the payroll reports she thought I’d need.

At 8:05pm, I got another mass email message from my banker: “I’m so thankful for your patience through this process and want to ensure (sic) you that along with myself, our entire business banking team is doing all we can to process your request.” He repeated the same instructions as he did in the afternoon, this time calling them a “few tricks to ensure you have the highest likelihood of circumventing technical issues.” As you can imagine, nothing changed when I attempted to complete the application process, including the error message in red.

Wednesday, April 8

I woke up unwilling to continue to “sit tight.” At 7:06am, I emailed our banker and asked him if he could help us find another way to get through. I got a response from him at 8:52am that simply said: “You’re in the queue!” I wanted to believe that the queue was actually moving. As the day progressed, more mass emails from the bank came, and it became clear that—unless some miracle happened—this problem wasn’t going to be fixed anytime soon.

It doesn’t help to keep hearing that the funds will be distributed on a first-come, first-served basis. And I have no idea how many other SBA lending banks out there are actually processing their customers’ PPP applications while I’m waiting for the largest bank in the United States to repair their online application system. Where are business owners in need supposed to go?

Thursday, April 9

This morning, my Director of Finance shared some welcome news. Earlier, when she’d logged into our payroll and HR platform, she saw a notification that hadn’t been there the day before, offering to process PPP loan applications through a recommended lender. We had nothing to lose. The experience with our big bank has been a disaster, and it doesn’t look like they’re getting their act together anytime soon. So we completed the application—the same application—again. The required payroll worksheet would’ve been challenging for me without my Director of Finance, and I’ve been so grateful for her experience, and the simplicity and clarity of our Finance system.

All together, she uploaded:

  • The payroll worksheet, which calculated the funds we’re eligible for
  • A photo of my driver’s license
  • Our payroll reports
  • A voided check
  • An IRS Proof of Payroll Form 941
  • Six months of our most recent bank statements

She hit the submit button and, within seconds, we found ourselves on the screen we’d been wishing for: “Application Complete! Thank you for your loan application. You should receive an email within the next 72 hours with the CARES Act Paycheck Protection Program Loan decision. You may now close out this window.”

I’m assuming 72 hours means three business days. Two days to go.

Friday, April 10-Monday, April 13

I’m waiting 72 hours (three business days) for the small bank’s decision on our Paycheck Protection Plan (PPP) loan to arrive. In the meantime, my Director of Finance let our banker know that we applied through another bank. The mass emails from our big bank have stopped. We’re not sure if that’s because we applied elsewhere or if it’s an indication that the bank abandoned the small business owners who couldn’t get through, focusing their attention on processing the successfully submitted applications. 

Tuesday, April 14

Today’s the day we’re supposed to get a decision—and I’m getting radio silence. I went to the bank’s website to look for anything useful and found a message saying that, if we haven’t received a confirmation email within 48 hours of submitting our application, we should contact the bank. That would have been yesterday. I wrote to the email address provided asking about the promised confirmation email and status of our application. No response. The news outlets are reporting that all the PPP funds will be gone on Friday, April 17. My expectations of receiving our share of the $349 billion are all but gone.

Wednesday, April 15

The news outlets are reporting that the PPP funds are gone as of today. That’s it then. My company won’t be getting any relief unless there’s another round of funding. We’re putting together reports to project revenues 60-75 days out so we can determine where our drop in revenues is going to bottom out. I’m relieved that we have the systems in place to produce the necessary data so that we can create the “worst case” and “most likely” scenarios.

Thursday, April 16

It’s confirmed: The $349 billion in SBA funds earmarked for the retention of small business employees through the Paycheck Protection Program has been distributed to just a fraction of the small businesses suffering losses from the coronavirus pandemic. We’re not one of them. I’m thinking about all the companies—so many of our small business clients—who aren’t either. I’m disappointed and I’m hoping for a second round of funding. 

Friday, April 17

It’s a quiet day on the loan front. I’m listening to journalists share stories they’ve heard from small business owners about the frustrating process of submitting an application and coming up short. The stories sound just like mine. I’m thinking about how we can increase our chances of being part of the second round of funding.

Saturday, April 18

At 9:03am today, I received a form response from the small bank to my multiple inquiries about the status of our PPP application. It started out, “Thank you for contacting us with your inquiry. We hope our response was satisfactory.” They never responded to any of my inquiries. Definitely not satisfactory. What customer service strategy did this come from?

I wrote an email to our banker an hour later saying that I wanted to give EMyth the best chance of receiving funds in the second round of PPP funding. I asked him if we were still in the queue or if our late application to another bank (which we'd informed him about) took us out of it. I got a gracious response mid-afternoon saying that he’d send the PPP application via DocuSign soon, and that he’d “place [our] application and supporting documentation needed with [our] case in the queue.” We had a brief exchange about how hard it’s been for him over the past couple of weeks, working seven days a week to serve his customers.

Three minutes later, the PPP application arrived with instructions on how to complete it. With my completed application for the first round in hand, I filled in all the information I thought was being requested and happily hit the Finish button. It was unsuccessful. Up popped a request for attachments, but with no instructions on what to attach. After a welcome call with my competent and calming Director of Finance, I realized that I needed to attach our 2019 quarterly payroll summaries. Once I did that, the application went right through.

Twenty-two minutes later—now 8:02pm—I received another request for information from my bank. It looked just like the first request. Was it a duplicate? I wrote our banker to ask if we’d supplied all the necessary information. This second request, he replied, was a Promissory Note with the terms and conditions I needed to sign. I opened it, quickly scanned the boilerplate, signed and sent it through. I emailed my banker at 8:21pm to confirm. 

At 8:29pm, he responded with an apology for not explaining that there were two parts to the application, which touched me. He ended his final email with: “You’ve done your part. I will upload everything to your case file after reviewing and let you know when it’s been completed.”

I’m ending my day feeling like I’ve done everything I could to set my company up for success in Round Two but still have no idea where we actually are in the queue.

In my afternoon call with my Director of Finance, she told me that she’d spoken with our banker earlier that day. According to him, the bank received over 60,000 attempted submissions in the first five minutes of taking applications on April 3. The overwhelming traffic crashed the system and it never recovered before the Round One funding was used up. I wish the bank had just been transparent—that would have saved us all a lot of angst.

Sunday, April 19

I turned the news on this morning and saw our Treasury Secretary, Steve Mnuchin, telling America that “we’re very close to a deal today” for small businesses. He talked about another $310 billion for the Paycheck Protection Program. No one knows what percentage of the small businesses in this country will be supported with the projected $659 Billion ($349B plus $310B). It can’t possibly be all of them. My guess is that the economists advising the president have calculated the percentage of businesses the economy can afford to ignore (and possibly lose) and still recover. It’s the harsh reality that many small business owners are likely to face.

Monday, April 20

This morning, I woke to an email our banker sent at 11:32pm last night. He really is working on behalf of his customers from morning till night. As promised, he told me that he submitted our completed file to underwriting for review and that he’d keep me updated about any additional funding passed by Congress. He thanked me for our relationship in a genuine way. Whatever happens, I feel he did his best and so did I.

So, here we are. Another cliffhanger. If you’re in a similar position, all we have to do now is wait over the coming days to discover our fate. I wish you the very best.

While we’re waiting to see how this story ends, I want to share my biggest takeaways from this application process not because we’re likely to go through something like this again anytime soon, but because there are meaningful lessons in crisis situations that we, as business owners, should always be prepared to learn. 

  1. Establish a relationship with your banker. Take the time to get to know an officer at your bank so they can get to know you. Banks have rules and procedures that don’t give bankers a lot of latitude, but whatever discretion they have can work in your favor if you have a personal relationship.
  2. Give yourself solid financial support. Make sure you have someone in your life who you trust—a bookkeeper, controller, CFO—someone who knows the numbers of your business, who can navigate the financial environment in which you operate, and who you can depend on to give you information and guidance when you need it most.
  3. Innovate and orchestrate your Finance System. Create a financial reporting system that makes it possible for you to access all the financial information you need to assess the health and well being of your business, submit financial information to third parties and minimize your anxiety about where your business stands.
  4. Innovate and orchestrate your Customer Fulfillment System. If this application process has reminded me of anything, it’s how important it is to care about the people our businesses serve and to keep the promises we make to them. It’s not just so they’ll come back (though that’s reason enough), but because it’s the right thing to do. The mass communications from both the banks we applied through—one small and one giant—have been confusing, withholding, indirect and unhelpful. Every business needs systems that ensure their customers are treated the same way, consistently, just the way they’d like to be treated whether they’re personally at the interface of the relationship or not.

Tuesday, April 21

Now that our application is with the underwriters at our big bank—and out of my hands—I’m reading everything I can to assess our chances of receiving Round Two funding. According to news outlets, small businesses have sued big banks, including ours, alleging that they gave preference in Round One to the largest eligible companies in order to maximize their fees. What happened to first come, first served? What happened to saving as many small businesses as possible, businesses suffering from one of the deadliest pandemics of all time? It’s despairing to imagine a bunch of banking executives coming together in a video conference and figuring out that they could make more money by giving Paycheck Protection Program funds to the businesses that need it the least.

Wednesday, April 22

We posted Week Three of this series this morning and I got some uplifting messages from business owners, each with their own version of this story. One owner admitted that he hadn’t talked to his banker in over two years and thanked me for suggesting that he maintain a relationship with him. Another felt inspired to systematize his own Client Fulfillment process out of frustration with his bank’s miserable customer service during the application process. Being able to help even one small business owner discover something they can control—when so much is out of our control—brings me joy in the face of all this difficulty.

Thursday, April 23

I had a very happy start to the day. At 9:11am our Director of Finance sent me a message that she got a call from our banker—our bank’s underwriters have processed our application and it’s in Stage 3. I understand this to mean that it’s on its way to the SBA. She sent me the fingers crossed emoji, which made my heart smile.

Congress passed the bill today that appropriates another $310 billion for small business PPP loans. I sure hope it goes to the most deserving this time.

Friday, April 24

Since we never received confirmation from the small bank that our application had been submitted in Round One, I long abandoned any hope of getting a PPP loan through them. But first thing this morning, I received an email from the vendor that handles our payroll who recommended the small bank as a preferred lender. They notified me that our PPP application had been “abandoned” and invited me to reapply. Why am I getting this notice so late in the game? Do they really think they can help small business owners get Round Two funds who hadn’t already reapplied?

Saturday, April 25, and Sunday, April 26

Still feeling disappointed by my small bank experience, I read an article this weekend on the inability of small banks to compete with big banks for PPP funds. It described an online portal called E-Tran that banks use to submit their customers’ applications. With their superior technology, big banks can enter their customers’ data more quickly, essentially locking out customers who try to apply through a small bank. Is it possible that no small business that applied for funds through a small bank received them? Is it possible that only the small businesses that got through to the SBA on the first day had any chance of receiving Round One funds? Were the vast majority of us waiting all this time for nothing?

I hear that Round Two funds will be distributed on Monday. Let’s all see how our story ends.

Monday, April 27

Well, the loan program relaunched at 7:30am PST this morning, but it’s now the end of the day and I haven’t received the coveted news that my company was among the chosen. I’m not surprised given how clearly underfunded the loan program is. When this is all over, I’ll be interested to find out what percentage of small businesses actually received funds through PPP. I have to admit, I’m disappointed. We were on track in January and February for our best year ever with a 27% increase in revenues over last year based on a pretty conservative projection. The PPP funds would make it possible for us to not only keep our team employed, which we’re committed to do in any event, but to also make all the investments we were planning to make to create that kind of growth. I haven’t given up all hope. Let’s see what the week brings. The final chapters haven’t yet been written.

At the same time, when I read the devastating stories of what people in business are going through right now—owners of restaurants, hair salons and retail shops in New York City for example—I feel pretty fortunate. I have a new appreciation of the value of our cash management systems, our financial reporting systems, our strategic planning and our dedicated people who show up every day—remotely, of course—to help our small business clients and coaches get through this.

As I continue to navigate this application process with all its ups and downs, I feel more committed than ever to helping business owners learn how to give their customers what we all crave from the businesses we frequent—consistency and predictability. Nothing about this process has been consistent or predictable. Expectations were set that weren’t met. The banks promised to acknowledge receipt of our applications and they didn’t. They promised to turn our applications over to the SBA and they couldn’t. The SBA promised to help us recover and they weren’t prepared to serve but a fraction of those in need. With this lack of consistency and predicability, we can't allow ourselves to trust our government or our big banks when we need them the most. There’s a big lesson here. As business owners, we can do better than that. We can figure out how to keep our promises to our customers. Consistently. Systematically. Creatively. Joyfully.

Tuesday, April 28

Today is the second day of Round Two funds distribution for the Paycheck Protection Program (PPP). It feels painfully quiet. I’m not hearing much on the news about the $310 billion distribution to small businesses. And I haven’t heard from our banker either. I checked our online account for updates and found a box that said, “PPP Application Status. Check the status of the completed application you submitted. We will update status as an application moves through the process. Another ray of hope that I’ll at least find out something. I clicked on the link and the message read, “If you submitted an application for an SBA Paycheck Protection Program loan with a [bank] representative, your application status won’t be displayed here.So much for having our banker personally submit our application. At that moment, when I was looking for information about where our application was in the queue, that wasn’t doing me any good.

Wednesday, April 29

I was feeling impatient this morning after two days of radio silence. I emailed our banker at 9:43am to ask for any information about this round of funding. Did he think we had any chance of getting approved? I don’t know what I expected to hear back but, in less than a minute, I got an automated response. Here’s some of what it said:

Thank you for your email. My reply may be delayed due to extremely high volumes of requests related to the Paycheck Protection Program (PPP) [...] Until then, here's important information I'd like to share in case you applied for and have questions about the PPP process:

  • Now that the SBA has reopened for PPP funding, [the bank] is transmitting completed applications to the SBA starting with those in Stage 3.
  • Each evening clients who receive SBA approval will receive confirmation by an email from [the bank].
  • If you don't receive a confirmation email, you will remain in the queue.

At least that was something. I knew our application was in Stage 3 thanks to a message from our banker on April 23. Maybe it actually made a difference that our application was among the first to be submitted to the SBA by our big bank?

The fourth installment of this series posted this morning. A reader commented that he’d received Round One funding in just two weeks through a small regional bank. He shared how responsive his banker had been in helping him gather the information he needed for the application and wished me “the best of luck.” It’s heartwarming to know that someone was approved and that the SBA had made it easier for his business to make it through this COVID-19 crisis. And I have to admit to some envy.

I waited until this evening for an email confirmation from our bank with our approval. Nothing

Thursday, April 30

I don’t know what to think today about our chances of being funded. The news outlets are reporting that this round of funding will be distributed much faster than the 13 days it took to run out of Round One money. I guess that means I’ll find out our fate sooner rather than later. I’ve read statistics indicating that this round of funds is going to smaller borrowers. The average loan so far this week is $95,000 versus $206,000 in Round One. That’s comforting. Even if we’re not approved, I love knowing that the businesses receiving funding are the ones that really need it. I hope it’ll make a difference for so many who were forced to close their businesses and lay off their employees when the pandemic hit. 

I stayed close to my email this evening hoping for our bank’s confirmation of our loan approval. Again, nothing.

Friday, May 1

I got an unexpected call mid-afternoon from a representative at our bank—someone I’d never spoken to before—who said he was reaching out to customers to find out how they were doing during this difficult time. I wondered if he was calling on behalf of our banker or if he knew anything about the status of our loan application. It took me a minute to realize that he had no idea I was waiting impatiently to find out where we stood in the PPP queue. I shared how our banker had graciously walked us through the application process in spite of the demands on him, and how difficult it was having no information about our status. He promised to get a message to our banker and assured me that he’d personally follow up next week even if he had bad news. I thanked him and we hung up. The prospect of bad news jolted me.

At 5:23pm, our banker called. My first thought was that the bank representative from earlier had encouraged him to reach out. But that wasn’t it. Our banker called me to tell me WE WERE FUNDED! I was shocked. I even asked him if he was sure. He assured me he had no doubt. I thanked him from the bottom of my heart and my eyes welled with tears of relief. We talked a bit about the emotional roller coaster this has been for both of us. He described moments in his kitchen with his kids when he was beating his fists on the table because he was so frustrated by this process. It was lovely just to talk with my banker without our roles, without conventions—just two humans sharing a happy ending. With all the disappointments he’d experienced, he must have felt better about helping us than he was even able to express. Before we ended our conversation, he told me that this round of PPP funds would be gone by Monday and that our funding would be in our account by Monday or Tuesday.

I got off the phone and sat in my chair for several minutes trying to let it in. I noticed that my growing sense that we wouldn’t get funded was still standing in the way of reality. What I could let in was gratitude—gratitude for the difference this was going to make to my team and the small businesses who benefit from the work we do, and for my own ability to let go of this painful distraction in my life.

After sharing this with my family, I called our Director of Finance immediately with the still-astonishing news. We giggled like little girls. We’d both done everything we could to make this happen. I’m cherishing this piece of history that the two of us will always share. 

Saturday, May 2

I woke up this morning to a very early email from our banker—the funds were in our business account. I immediately checked and they weren’t there but I wasn’t concerned. It was clear he had information that I didn’t. I replied to tell him what I was seeing on our account screen and he sent me a screenshot of his view of our bank balance with the loan balance right there. His thoughtfulness made me smile. “We did it,” I thought. It was all worth it.

On Monday morning, the funds were in our bank account. The word spread pretty quickly throughout EMyth that we received our share of the SBA’s $659 billion PPP funds. And even though our team is dispersed throughout the United States—we became a fully remote company in 2019, months before the outbreak of COVID-19—I could feel the collective sigh of relief. 

This money provides safety and security for our team and for myself in the face of a sizable drop in revenue triggered by the exit of coaching clients, owners who've been feeling for the past two months that their business is in a life-or-death situation. I’m thinking about these business owners a lot—good people with meaningful dreams, people who took the difficult step to get the help they needed to realize those dreams and then felt forced to shift gears in order to survive. My heart goes out to them. I hope they too were able to secure their piece of the PPP pie. Securing ours means that we can continue to be there for them whenever they’re able to focus again on working on their business, not just in it. I hope they can find their way back to the important work they started: building a business that’s systematized, organized and metrics-driven, where the culture reflects the business owner’s values and operates in a way that serves their life rather than consumes it. So that when the next crisis hits, big or small, they can stay right where they are, immovable, safe in the conviction that they’re prepared for anything.

I’d love to hear about your experience applying for a PPP loan. Please share your story in the comments below. Be safe and stay healthy.

Ilene Frahm

Written by Ilene Frahm

Ilene joined EMyth in 1982. During her 17 year marriage to Michael Gerber, she collaborated with Michael on "The EMyth Revisited" and served as his editor and publishing agent on it, as well as on a number of his other books. Ilene spent more than a decade working on EMyth (not just in it) to build a company that didn’t depend on her. Except for one short stint, she hasn’t held a position in the day-to-day operations of EMyth since she retired as its President in 1999. Ilene and her husband, Gerrit, spend two months a year at their cottage on the north coast of Spain. The rest of the time, she does what she loves: mentoring staff, training salespeople, and supporting everyone in the company, at every level, in their leadership.

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