It Ain’t a Stimulus until It’s Law

SBA Failed the American Small Business owner during the COVID in the way it implemented the EIDL program guidelines as set forth in the CARES Act.

Under the CARES Act provisions for the Economic Injury Disaster Loan (EIDL), SBA was to provide a totally-forgivable Grant of $10,000 PER BUSINESS paid within 3 days of filing application for EIDL program online. There was never any requirement or provision of anything different from that simple language in the Legislation.

SBA subsequently and arbitrarily changed the Grant to a distribution of $1000 per employee, along with capping EIDL loans at $150k when they’re supposed to go up to $2M as per Congressional Legislation.

The $1000 per employee nonsense was exactly that, complete nonsense and a violation of The CARES Act and a capricious and arbitrary decision by SBA without direction or permission from Congress.

CONGRESS DECIDES HOW U.S. TAX DOLLARS ARE SPENT, NOT FEDERAL AGENCIES.

When taken to task in a Senate hearing, SBA Administrator Jovita Carranza and US Treasury Secretary Steven Mnuchin both replied like Ralph Kramden, “Hummina…hummina…hummina…” and meekly stated that they made these arbitrary decisions to change the program (and ignore Congressional mandate) because SBA was worried they would “run out of money”.

Imagine if the US Navy was in danger of running out of money? Would they stop sailing ships and flying fighters? NO. They would ask Congress for more money.

THAT is the most massive #FAIL on the part of SBA Administration (and Treasury, for their part) in not returning to Congress to request additional funding.

In making these decisions, SBA failed in its fiduciary duties to the American Small Business owner. FYI: In the currently proposed Second Stimulus Legislation, Congress made sure to hold SBA accountable by requiring definitive reporting deadlines that SBA must return to Congress to report on progress of the funding of the various programs.

You can watch the Hearing here.

We strongly urge EVERYONE to stop watching all the alleged YouTube experts expounding on the exact rules of the new Stimulus. When this is actually signed into LAW, SBA still has to create the RULES.  Until SBA creates the RULES, NO ONE can say with any certainty what they are.  Not me, not anyone.  We can only interpret what we read. I read the Legislation several times.  To Trevor’s practiced eye (30 years lending with Government programs), some language remains unclear and confusing.

Our interpretation—and that’s all it is—doesn’t mean a hill of beans until SBA MAKES THE RULES.  Instead of watching YouTube “experts” watch kitten videos. It could prove to be a better use of your time.

How to Apply for an EIDL Loan

An updated sample of the EIDL application with Trevor's commentary on what changes the SBA has implemented when underwriting your EIDL loan.

Submitting documents to SBA

If you’re submitting documents to the SBA, you’ll  need to do it the RIGHT way to ensure a smooth process! Here’s our advice (based on Trevor processing loans for over 30 years) on the best way to submit documents:

1. PDF ONLY. No photos, no other file types. With the volume of documents and applications they’re working on, SBA Loan Officers simply do not have the time to convert your documents to PDF. They’ll probably set it aside until they have time.

2. Separate PDFs for separate documents. A PDF of a voided check should be separate from a PDF of a photo ID and etc. When SBA has to separate your documents from a single PDF it slows down your entire process.

3. Label the PDF on your end. For example of a labelled PDF: “COMPANY NAME YTD Income Statement JAN 1 to SEP 30 2020” or “COMPANY NAME Voided Check”

4. List the documents you’re submitting in the body of the email. For example, SUBJECT LINE: “Company Name: Documents submitted DATE”. Then, in the body of the email: “Attached to this email: YTD Income Statement JAN 1 to SEP 30 2020, Voided Check, Photo ID”

5. We recommend using the NOTES App on your iPhone to scan documents. Ridiculously easy.

6. BEST Scanning app of all: “ADOBE Scan” which you can download to your smartphone from your respective app store.

7. When scanning with your smartphone, keep the document within the scanning borders. Most often the scanning app will give you a highlighted “border” for the document.

8. Always scan documents on a flat surface and scan straight, not slightly tilted.

Watch our WTF Wednesday video where we discuss why these are important.

For a Smooth Ride

7 Tips to Submit Documents for Your EIDL Application

Grab these 7 tips to better prepare you on how to submit you documents to the SBA. You have to guide SBA to an approval. We've seen that they don't try to make it work if something is confusing or sloppy; they easily decline.