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SBA: The Painful Truth

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For more than 18 months we’ve processed EIDL files for our Clients. For 18 months we’ve dealt with the complete dysfunctional insanity known as the Small Business Administration (SBA). Today we’re sharing with you the “painful truth” of what you can expect with your interactions with the SBA.

We know there are many videos, blog posts, newspaper articles, not to mention SBA “good news” propaganda out there in the world. We know that millions of Small Business Owners are desperate to receive the vital funding available through the EIDL program. We know that, in the moment of truth when a Small Business Owner (SBO) receives ANY kind of notification from SBA, or any hint of activity or whisper of progress, the typical SBO loses their minds, thinking, “Finally! At long last!” 

It’s a lot like Tom Hanks on the beach in the movie “Castaway” when he sees an airplane flying overhead. He’s so desperately, depressingly, excited, to even dare think he might be one tiny step closer to being rescued that his emotions overwhelm him, first with the excitement stage, then in the absolute grief stricken stage when he realizes he’s lost, without any hope.

That’s exactly how millions of SBOs feel with the SBA and the EIDL process.

Here are some “painful truths” to help you prepare yourself to better handle your emotions and potential anxiety.

The Background.

Trevor is a 30+ year veteran Mortgage Loan Officer. He has literally “seen it all” and he dealt, almost exclusively, with U.S. Government lending programs. He leverages this experience in two (2) ways for our EIDL Clients. 

First, because he understands Government regulations and processes, he approaches the EIDL application with a different perspective from the average Small Business Owner. It’s more pragmatic, more logical, more process-driven. 

Secondly, given the opportunity to speak directly with an SBA representative, Trevor flashes his credentials like a big city homicide detective in a small town police station after his grandmother smacked her car into a neighbor’s shrubbery. 

He’s polite, respectful, but, because of his experience, and because he presents himself as a colleague and fellow traveler, the SBA representatives, more often than not, communicate with him differently than they would to you. Often, they share insights into the SBA process that would NEVER be revealed to the average SBO.

For instance, yesterday a young SBA Loan Officer made the following two statements upon hearing Trevor’s “I’m a Loan Officer” introductory rap: “I’ll be honest, the guidelines change almost weekly.” And, “I’m not talking out of school, but sometimes, I get quite frustrated with many of my colleagues and the notes they make in the files.

In other words, there’s an entire “behind the scenes” aspect that SBOs simply cannot grasp. And you may not understand how that behavior at this Federal bureaucracy is prohibiting you from getting access to these vital funds.

Important “Painful Truths” to understand.

Painful Truth: Seven days to submit documents.

SBA says you have seven days to submit documents (we’ve seen three days also!). Problem is twofold:

1. Even if you submit the requested documents, say an IRS 4506-T, within three minutes of receiving the request, you’re most likely to hear nothing back from SBA for weeks. Or months

2. We’ve seen SBA indicate this ridiculous rule of “seven days to submit” only to get an email six weeks later, looking for the same documents, whether they were submitted or not. In short, what the SBA “says” about your process must NOT be trusted AT ALL.

Painful truth: multiple IP address log-ins. 

Yes, we’ve discovered that SBA representatives are putting fraud alerts on your EIDL file if you’ve logged in from multiple different IP addresses, whether by emailing the SBA or by visiting the SBA portal. 

That fraud alert is literally stopping your file in its tracks. 

Many SBOs have been working for many months, or even more than a year, to get their EIDL processed. In all that time, out here in the real world, it’s perfectly reasonable that someone might use different computers or devices, or different Wi-Fi networks to interact with the SBA. 

BUT, instead of understanding how the world actually works, the SBA treats these normal activities as fraudulent. Meanwhile, the real criminals have been stealing money from the SBA and the US Government since day one. 

You are getting lumped in with the criminals simply because you used your iPhone to log into the SBA portal on Monday, and then your home computer on Thursday.

Painful truth: SBA representatives either don’t read your complete documents submitted, or, worse, they don’t know their own required forms.

We’ve seen it all in this regard. We’ve used the SBA’s own forms (3501, 3502, 1368) to submit Reconsiderations and Appeals, only to get yet another ridiculous document request, or worse, a declination, because the SBA person working on the file didn’t bother to read the SBA forms we submitted, or didn’t understand them.

The reasons for this behavior are layered, ranging from:

  • lack of time to review the file thoroughly (a true underwrite takes hours, not minutes)
  • lack of training or knowledge, and finally
  • utter incompetence

What can you do about this? Nothing, other than keep plugging away.

Painful Truth: Management Review

Even if your SBA Loan Officer is a Superhero on your file, because of the aforementioned fraud consciousness of SBA, your file must go to a supervisory level to sign off on the Loan Officer’s approval. Not only can this be a “black hole” for your file disappearing, but some of these supervisors are attorneys, not loan officers. So, even if you had a great conversation with your Loan Officer, once the supervisors get your file…well, you understand the painful truth revealed here.

When your EIDL file is declined, you will NEVER in ONE MILLION years be told the truth of why the file was declined.

STOP ASKING WHY. They won’t tell you, or will give you a reason that may or may not be accurate. This is mostly because there are no accurate notes in your file at SBA and also because to answer your question literally requires a FULL UNDERWRITING REVIEW of your file.

The Customer Service rep or Tier 2 Agent cannot give you that level of attention. They cannot. PLEASE STOP ASKING. 

Final Painful Truth: YOU, the EIDL applicant. 

Your emotion and anxiety and failure to take care with your own documentation, gets in the way.  We see this time and time again with our own clients. 

They want to tell “story”, and yet, they submit documents that are inadequate, incorrect, contradictory, and incomplete.

We’ve said this thousands of times: STOP STORY-TELLING.

The SBA reps not only don’t want to hear it, but you’re actually muddying the waters of your loan process. Do you know what it’s like to have to sort through 23 novel-length emails explaining and telling stories? It’s impossible.

We’re advocates for our clients. Can you imagine how the SBA representatives react to this nonsense? You’re literally your own worst enemy with the EIDL process. We know, the truth is painful.