The Paycheck Protection Program (PPP) will offer some relief to small businesses in Missouri as it launches today, Friday, April 3. The Missouri Bankers Association and the Missouri Chamber of Commerce and Industry ask for patience from the public as the program begins.
"The economic impact of the COVID-19 public health crisis is being felt in every corner of Missouri. As this emergency stretches into weeks — and perhaps months — many employers in our state are going to need a lifeline to survive," said Daniel P. Mehan, president and CEO of the Missouri Chamber. "With the recent passage of federal economic relief measures, Missouri businesses are eager to learn more and understand their options. The Missouri Chamber is working to connect these employers with the best resources available. Often, one of the best resources are trusted local banks and lenders, which are at the front lines of administering the new federal relief programs in communities across Missouri. We urge our members to collaborate with their local lenders to help stabilize our economy and put Missouri in a position for a strong recovery once this crisis ends."
Application volume will be very high as the financial institutions qualified to offer these loans will strive to keep up with demand, but sheer volume won't be the only reason the program will take time. Guidance from federal agencies and regulators that financial institutions need to move forward with PPP loans was just released Thursday evening. Since then, bankers have been reviewing the guidance to understand the expectations of the federal government in the steps needed to begin issuing funds. It is anticipated that further guidance may be released by the U.S. Treasury Department and the U.S. Small Business Administration over the coming days.
"Keep in mind that PPP loans aren't the only way Missouri's banks are helping their customers," said Max Cook, president and CEO of the Missouri 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."
Missouri banks entered this pandemic from a position of strength and are well-equipped to help their communities. MBA and the Missouri Chamber recommend the following five things businesses can do right now.
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.
Plan for the next three to six months, if you haven't already. Many businesses may have sufficient funds or access to capital for the first two to three months. However, it is unknown how long the pandemic will last, so look ahead, both in terms of a potential lengthening of the pandemic and how you will handle recovery and re-opening your business if you are currently closed.
Be ready to produce required information quickly to help your lender with your application. All loan programs still require some information 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.
Don't panic and draw on lines of credit unnecessarily. There is plenty of liquidity in the system, so don't panic and draw on lines of credit unnecessarily. Just as we encourage 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.
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).
The Missouri Bankers Association is a statewide trade and professional organization in Jefferson City that represents the interests of more than 245 banks and savings and loans in Missouri. MBA serves as the principal advocate for the Missouri banking community and provides educational opportunities, products and services that assist bankers with enhancing their banking operations. For more information, visit mobankers.com. Follow MBA on Twitter at @mobankers.com.
The Missouri Chamber of Commerce and Industry is the largest business association in Missouri and is the 2019 State Chamber of the Year. Together with the Missouri Chamber Federation, the Missouri Chamber represents more than 75,000 employers. To learn more, go to mochamber.com or follow @MissouriChamber on Twitter.
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