Earlier this year, as the pandemic stretched past it’s first year, the SBA announced that it was increasing the loan limit on the popular EIDL from $150K to $500K. What they didn’t tell anyone was how difficult it would be to receive the increased funding.
Last year, when the pandemic began, it was ridiculously easy to receive the initial $150K. The process took as little at 7 working days from start to finish. Now the process seems mired in bureaucratic red tape.
Why has it become so difficult?
Many things have occurred in the past 16 months, including ridiculous amounts of fraud, which caused ugly headlines and bad politics for officials trying to get re-elected. In response, the SBA has tightened up their due diligence process considerably.
If your application isn’t perfect, it will take forever. Remember that this loan is primarily underwritten by machines. In completing due diligence, the name on your application needs to match the name as presented on your income tax return, as well as what is posted in the Secretary of State database.
If you apply as Accounting Solutions and the name the machine finds is Accounting Solutions Ltd., the application will stop right there and need to be reviewed by a person. Given the personnel shortages the SBA is currently experiencing, that alone could take 90 days.
What if they find a substantial problem on your application? That will require them to request a document request, or a flat out decline the request. Getting reconsidered for the loan has become almost impossible.
I’m not saying that you shouldn’t apply for this if it is necessary. I am telling you to be extremely careful. Spend some time on the application. Make sure that every question, no matter how it doesn’t apply to your particular case, is answered honestly.
You may only get one shot at getting it right.
Let me leave you with this.
As I look back at the last year, I see extremes.
When I drive my neighborhood, I see many businesses that have closed. Many entrepreneurs just gave up and packed it in. Only two of my clients shut down. One was going to retire anyway, while another just didn’t have the backbone necessary to get through this.
I’m proud to say that this column was able to provide so many with the information they needed in order to make it through.
So many of you have flourished. Many had the best year of their lives. They expanded their businesses, their offerings, and their profits. Many radically changed their business plans for the better.
We live in unprecedented times. Never before has so much been available for sale and so much additional money out their for the taking. And it only took one thing to make it happen.
It took balls.
Many sat in their homes, watching the pandemic numbers on CNN, getting more afraid by the minute. Others realized that it was a great time to market their offerings, and said, “Damn the torpedos. Full speed ahead.”
It looks like we’re going into another one of these cycles. Which category will you fall into?
There isn’t anything easy about this. An uncertain future is a difficult thing to deal with, but that’s the job. Like it or not, you’re supposed to be an entrepreneur.
You need to be that steady hand at the wheel, that constant in the storm. When all around you cringe in terror, you need to remain calm, knowing the answers others need to be affective. As Kipling taught us, you need to keep your head when all around you are losing theirs.
It should be easier this time. We’ve been through this before and know what to expect. This isn’t our first rodeo. You may not be ready for all of this again; no one is.
But if it comes, you’ll know what to do. Be ready. Be alert. Semper Fi.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. If there is anything you need, whether you are a current client or not, you have but to ask. I’m here and I remain,
Accounting Solutions Ltd.
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