LAS VEGAS – The Nevada Bankers Association is encouraging small business owners affected by the coronavirus pandemic to apply for federal aid, including the Paycheck Protection Program (PPP). The federal program is designed to offer relief to small businesses, helping them make payroll, pay rent and fund other operational necessities for the next eight weeks until the crisis hopefully subsides.
“On behalf of Nevada bankers, we’re asking for patience as this unprecedented program rolls out to the businesses that so urgently need this help,” said Phyllis Gurgevich, Nevada Bankers Association president and CEO. “We expect a large number of businesses to apply for these loans, as there are about 5,400 banks throughout the United States, with roughly 1,800 of them being approved Small Business Administration lenders with experience in such programs.”
Sheer volume won’t be the only reason the program will take time to implement, Gurgevich said. Financial institutions still need guidance from federal agencies and regulators to move forward with PPP loans. For now, she said “there are more questions than answers” about the expectations of the federal government and the steps needed to begin processing applications and issuing funds as quickly as possible.
According to Gurgevich, working with small businesses is the backbone of what Nevada’s banks do. She said banks of all sizes have already been helping their small business customers with a range of assistance programs, even before the government approved this new initiative. The PPP program is an added and potentially powerful tool, but she added that “there are other existing options available to small businesses in need.” She encouraged Nevada businesses to contact their bank as soon as possible for more information.
“Fortunately, banks throughout Nevada entered this crisis on solid financial footing and are well-equipped to help their communities during this time of need,” Gurgevich added.
NBA offered the following five recommendations that local businesses can do right now:
1. Talk to your lender, if you haven’t already.
If you are experiencing or expect to experience cash flow problems, contacting your lender is the critical first step.
2. Plan for the next three to six months, if you haven’t already.
Many businesses have sufficient funds or access to capital for a few months. But since it’s not clear how long this public health and economic crisis will last, it’s important to look ahead, preparing for the crisis to potentially last longer than originally anticipated and to help your business recover and re-open if it is currently closed.
3. Be ready to produce required information quickly to help your lender with your application.
All loan programs still require some financial information in order for lenders to underwrite loans, including loan programs like the PPP initiative created through the federal CARES Act. Be ready to produce required documentation quickly to help your lender with your application.
4. Don’t panic and draw on lines of credit unnecessarily.
Unlike during the Great Recession more than a decade ago, federal and industry leaders say there is plenty of liquidity in the nation’s financial system, so don’t panic and draw on lines of credit unnecessarily. Just as NBA and others are encouraging consumers to keep excess cash in insured financial institutions, NBA suggests businesses keep their lines of credit intact until they absolutely need to access them. “There may be costs associated with accessing those funds,” Gurgevich explained. “So if you don’t need to incur that added expense, don’t.”
5. Have patience.
The banking industry wants to help people and businesses through these unprecedented times, but not all programs are up and running just yet. And even when they are, Gurgevich said intense demand and new programs and technologies can cause delays, from overloaded staff to newly created systems and websites crashing.
For more information on the Paycheck Protection Program, visit https://www.sba.gov/funding-programs/loans/coronavirus-relief-options.
About Nevada Bankers Association
NBA is the united voice of Nevada’s diverse banking industry. Members are dedicated to providing the best financial products, services and resources to drive and support economic growth, job creation and prosperity throughout the state of Nevada. Visit www.nvbankers.org.