Wisconsin Bankers Advise Patience as the Paycheck Protection Program Launches
Banks also offer customers additional help
The Paycheck Protection Program (PPP) will offer some relief to small businesses in Wisconsin as it launches on Friday, April 3. Wisconsin bankers ask for patience from the public as the program begins. Application volume will be very high as the fewer than 170 financial institutions (as of April 2, at 11 a.m.) qualified to offer these loans will strive to keep up with demand.
Sheer volume won’t be the only reason the program will take time. Financial institutions still need guidance from federal agencies and regulators in order to move forward with PPP loans. Currently, there are more questions than answers about the expectations of the federal government in the steps needed to begin issuing funds.
“Keep in mind that PPP loans aren’t the only way Wisconsin’s banks are helping their customers,” explained Rose Oswald Poels, president and CEO, Wisconsin Bankers Association. “They worked one-on-one with their customers to find solutions before PPP became available and they will continue to do so after the program is done.”
The good news is Wisconsin’s banks entered this pandemic from a position of strength and are well-equipped to help their communities.
The Wisconsin Bankers Association has created an online resource for small businesses and consumers located at www.wisbank.com/COVID-19.
WBA also recommends the following five things 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 3-6 months, if you haven’t already.
Many businesses we’ve heard from have sufficient funds or access to capital for the first 2-3 months. However, we don’t know how long the pandemic will last, so look ahead, both in terms of a potential lengthening of the pandemic and also in how you will handle recovery and re-opening of the business if you are currently closed.
3: Be ready to produce required information quickly to help your lender with your application.
All loan programs still require some information in order for the lender to underwrite the loan, including the ones created through the 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.
There is plenty of liquidity in the system (unlike the financial crisis in 2008) so don’t panic and draw on lines of credit unnecessarily. Just like we are encouraging consumers to keep excess cash in insured financial institutions, keep the lines of credit intact until you absolutely need to access them. There may be costs associated with accessing those funds and if you don’t need to incur the added expense, don’t.
5: Have patience.
The banking industry wants to help you through these unprecedented times, but not all programs are in place yet, and even when they are, technology can cause hiccups or delays (e.g. systems crashing).
By, Amber Seitz