LAS VEGAS – According to Nevada Bankers Association President and CEO Phyllis Gurgevich, it’s too soon to supply any specific local data on the “second draw” of the Paycheck Protection Program, although Nevada banks are reporting strong demand for these federal loans and many PPP applications are already working their way through the pipeline.
“Bankers are very busy processing PPP applications for Nevada businesses. As expected, there are some glitches in the application process, as well as some changes in application guidance,” Gurgevich explained. “Specifically, the PPP portal won’t accept a second draw if a first draw forgiveness application is in progress. If the business seeking a PPP loan in this second round has not applied for forgiveness of a previous PPP loan or its application for forgiveness has already been approved, there are no issues. But if a business has an application for forgiveness already working its way through the PPP system, we’re receiving reports of glitches. Lenders continue to communicate new issues that arise to SBA and are waiting for them to be resolved.”
She added that the pace of this second-round application process “is quite different than the first round, which seemed to be set up like a race. Approval was almost instantaneous in the previous round, allowing lenders to move immediately toward funding the loan.”
In this round, lenders and borrowers are very aware of the U.S. Treasury Department’s statements citing confidence the funds will meet qualified applicant demand. There is healthy demand and a very active pace, however the paperwork in this round is somewhat more complex for borrowers that are making a second draw. There are calculations required not just for the applicant’s average monthly payroll as before, but also how to calculate and determine if the business applying for a PPP loan has met the standard of at least a 25% reduction in total revenues during this period of time. Another big difference is a lag time between submitting the PPP loan to the Small Business Administration and getting the SBA loan approval, so it can be funded by lender.”
For this round, Gurgevich said there is a built-in delay of one to three days between submitting an application and getting it approved by the SBA and with SBA using civil and criminal penalties to fight fraud, borrowers will want to make sure to get this right.
In any case, she said the NBA and its members are eager to help with this process.
“NBA is conducting outreach to chambers of commerce and other business groups, as well as state and federal officials and really any group that may have questions or know of businesses that are unsure how to apply,” Gurgevich said. “NBA members are happy to participate in Q&As to help anyone interested in applying for a PPP loan, determining if they are qualified and ensuring that they can receive assistance through the program.”
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.