Frustrated with Calling the SBA

We know how frustrating it is to spend time and energy following up with the SBA on the status of Your EIDL loan or Reconsideration request!

We’re sharing our experiences from having worked on dozens of EIDL loans and our interactions with SBA Agents. We want to you to know you’re not alone in your frustration, but also to help you to understand how the system works.

1. WE LOVE SBA AGENTS! Every call we experience an SBA Agent who is very professional and eager to help business owners obtain the EIDL financing they need to survive this pandemic.

2. SBA Loan Officers are, to quote an SBA Agent, “Working 15 hour days” on loan requests and reconsideration requests.

3. Okay, once you understand the value of the intrepid SBA Agents and how enthusiastic and hard-working they are, let’s discuss the frustrations of follow up.

4. We did a video on “How To Speak With An SBA Agent” we recommend you watch that for tips on how to make your follow up call.

5. Next, know that SBA Agents don’t always have a complete picture on your loan status. Their system has notes about your file’s progress with “Codes.” We don’t know what those codes are, but let’s hypothesize that a typical code could be something like this: “9837: IRS Form received” or “9822: Email sent to Applicant”.

Trevor has seen coding like this in his previous career as a Mortgage Banker. It’s an efficient way for a system to track the progress of a file.We’ve spoken to a couple of Agents who told us they don’t know what some of the Codes mean when a file is in the Reconsideration system.

6. Apparently, the Reconsideration Team works like a “Black-Ops” enterprise. SBA Agents can’t speak with them and their Codes can’t be deciphered by the SBA Agent you call for a status.

7. Beware of general statements made by an SBA Agent such as “Reconsideration processing times are 5-6 weeks.” Another Agent told us that is not true; she’s seen Reconsiderations take substantially longer. She said the other Agent should never have made that statement. Moral of the story: Take anything an SBA Agent says on general matters with a grain of salt.

8. Don’t think you’re going to call and get very clear guidance. The SBA is STILL overwhelmed with the number of new and Reconsideration requests. There’s a lot of moving parts, a lot of confusion, and long waiting times.

9. Remain consistently vigilant, and always polite. Check in regularly on your file. You won’t always get a definitive answer, but once in a while you might discover the SBA sent you an email that you didn’t know they sent! We’ve seen that happen…the email was sitting in the client’s spam folder. Other times, no such email was received. Moving parts. Confusion. Not quite controlled chaos.

10. Patience is a virtue. We know you need this money to help you survive this pandemic. We know the SBA is working diligently. We also know that sometimes some folks in an organization (Bank, SBA, etc.) get a file and it sits there waiting its turn because that person in the organization is overwhelmed, confused, slow, or, maybe, just maybe, even lazy. Think of the real world and how folks work in your business; the SBA is no different.

Contact us with questions or maybe with some good news you’ve experience contrary to our unabashedly vocal disappointment.

Schedule a FREE 15 minute call to review any complications you’re having with your disaster loans.

Can I Apply For Another EIDL LOAN?

We received this question on Twitter: I already received an EIDL loan. Am I eligible to apply for another?

The Economic Injury Disaster Loan (EIDL) PROGRAM was created for individual disasters. For example, this month it may be a tornado in Ohio county. Two weeks from now it could be a flood in the state of Mississippi.

COVID-19 created its own unique disaster. The Small Business Administration (SBA) responded by offering an EIDL loan for the pandemic. If you haven’t yet applied for an EIDL loan, the deadline for new application is December 31, 2020.

We make this distinction because we want to answer this question accurately. The fact is you can apply for  multiple EIDL loans according to the SBA as long as they are for different disasters that have affected you.

In other words, if you received a COVID-19 EIDL loan in April, but your county was affected by a tornado in September (and it’s declared a disaster area), then you can apply for another EIDL for the tornado disaster. We confirmed this last week with the SBA.

You cannot apply for more than one EIDL LOAN for the same disaster. However, the SBA has a provision for up to two years after the disaster, you can request additional funding above the amount of your original EIDL loan.

Leave a comment below and let us know if this is helpful and what other disaster financing questions you may have.

Small Business Surviving COVID

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Some Lenders are beginning to open their doors, and their coffers, to businesses in need of working capital. However, the COVID-19 impact on lending guidelines has been brutal.

Lenders’ guidelines for these types of loans are typically tighter than pre-COVID, and every Lender requires a business applicant to provide a COVID Impact Statement.

Underwriters are taking a close look at how businesses plan to survive the continuing pandemic, especially diligent on management experience, cash reserves, equity, and business planning for pandemic-response.

Today, let’s look at some industries and businesses we expect to thrive and survive the COVID-19 crisis.

Logistics.  The pandemic panic in March and April exposed the weaknesses in supply chains, especially for groceries.  But the resiliency of the industry became quickly apparent with the exponential growth in demand for home delivery of goods from online shopping excursions as so many people found themselves locked-down at home.

Warehouses, sorting equipment, storage accessories, forklifts, robots, long haul trucks and delivery vehicles all have multiple sources of financing available to maintain and grow during the pandemic.

Professional Writers. Yes, writing for business, whether it’s email newsletters, website content, or White Papers, writers can thrive during COVID-19, especially with the trend towards remote working.

The downside to being a professional writer during this time is the influx of amateurs hustling for a work-at-home gig overwhelming the ranks of people you’re competing against.  If you’re a professional writer with Accounts Receivable from reputable business clients, there’s financing available to you to help you grow your business.  And, if you haven’t already applied, the SBA Economic Injury Disaster Loan (EIDL) is still available, even if you’re Self-Employed and you file a Schedule C as a Sole Proprietor.

Manufacturing.  Manufacturers can thrive during COVID-19 with three fundamentals in place:

  • Pivot-Planning
  • COVID safety protocols for employees
  • Supply surety

We know of one manufacturer who promptly converted his business to a COVID pandemic perspective by manufacturing components of PPE for health care frontline workers, notably plastic face shields.  He later enhanced his planning to create the decals for grocery stores that direct customers with one-way arrows and six foot social distancing location markers.

A manufacturing firm that can demonstrate its resiliency during the crisis, its ability to protect workers, and the confidence in obtaining necessary supplies for manufacturing processes is sure to find Lenders willing to provide financing, including for Accounts Receivable, Business Lines Of Credit, and Equipment financing.

Online-Motion.  We created this category at Aurora Consulting to define any kind of business demonstrating incredible pandemic-related-resiliency by either moving its business online where it didn’t exist before, or bolstering an existing online presence.  70% of Small Businesses have NO or minimal online presence.

The COVID-19 pandemic clearly demonstrates the need for your business to move online, to create product/service opportunities for consumers to engage with you remotely, and to integrate product deliveries with successful delivery systems.  The Small Business demonstrating sincere “Online-Motion” will find Lenders willing to provide financing providing a recently revised business plan demonstrates the strategies for success to survive.  Our firm Bridge Street Business Plans assists Small Businesses with this vital aspect.

Key Points of Financing Your “COVID-SURVIVING” Small Business:

  1. Management experience: substantial heft with more than three years’ experience.
  2. Equity: Whether it’s cash liquidity, real estate collateral, or other convertible equity, expect a Lender to want at least 30% equity.
  3. Credit. High credit scores, in excess of 700 for principals of the business.
  4. Cash Flow. Demonstrate how your business is cashflow positive during and through the pandemic.
  5. ROCK SOLID Pandemic Business Plan.  State the case for how your business is surviving now, how you will succeed through the crisis with a focus on strategies, profit centers, and an expanded vista that takes into account the new paradigm of limited customers in-store, remote work, online shopping, employee protections, supply-chain strength, and utilization of delivery options.

At Aurora Consulting we’re doing our part to help your Small Business survive COVID-19 with the following services:

  • Flat Fee Financing Consultation.  $750 gets your business a thorough review of your existing business plan, financial statements, and credit report.  We’ll then advise on the viability of finding Lender financing, whether that’s today, or in the future with our suggested strategies.
  • Bridge Street Business Plans.  We created Bridge Street Business Plans to assist our financing clients with a necessary component of a successful business credit application. We understand how to update your business plan to respond to the COVID-19 pandemic “pivot.”
  • Innovative Financing Products.  We know the Lenders who will lend and we know how they will lend.
  • SBA Economic Injury Disaster Loans. These loans are still available and we’ve become experts in this loan process.

Email us anytime to find out more about what financing products can help you become resilient to thrive beyond COVID.

 

Tough Questions from Lenders

The good news is that Banks and Lenders are opening up their coffers to provide business credit financing. The other news, that’s more anticipated than “bad,” is these Banks want business owners to answer some tough questions about preparedness for further pandemic-related challenges.

If you are applying for business financing—a loan or line of credit—that’s not Disaster Relief-related, here’s a sample from one of our Bankers on what to expect:

  • How has your business been impacted throughout the crisis?
  • How have you and your employees been affected? Your suppliers? Your customers?
  • What are your key priorities over the next 30/60/90 days?
  • How do you anticipate accomplishing these goals? What hurdles do you anticipate?

To achieve a successful response to your application, you should answer these questions with all appropriate gravitas and extreme detail.

  • The Bank wants to know that, should the pandemic-related lockdowns get tighter:
  • How have you planned to get through that?
  • Do you have cash reserves?
  • An employee-furlough action plan?
  • Do you have the ability to provide your services or products with a serious downturn in customer traffic (think early days of lockdown)?

Banks make loan decisions by assessing the risk on the credit profile of the Borrower. As with any aspect of a loan application, the COVID-19 pandemic has created another layer of risk for Banks. Your successful loan application will take that risk assessment into account as you prepare your application for submission by anticipating how to make a Bank/Lender get into a “comfort zone” about your ability to make payments on the loan as other challenges from the pandemic arise.

Reach out to discuss if your answers to these aforementioned questions would suffice. We are your advocate in the process.

Email us at Curious@AuroraConsulting.biz.