Alabama Banks Prepare to Process P3 Applications, Loans
MONTGOMERY, Ala. (WSFA) – Small businesses hardest hit by the pandemic may soon receive a forgivable loan under the federal paycheck protection program. Congress’ latest COVID-19 relief plan allocated money to a second round of P3 loans to help businesses get their payroll.
Alabama Bankers Association president and CEO Scott Latham said banks were rushing to process loan applications and disperse funds.
“It’s a lifeline that can help and so we encourage them not to be afraid to seek it out,” Latham explained.
Applications for PPP loans were opened this week for small businesses and community banks.
“The first opportunity for these institutions to give loans from yesterday is to make sure that we reach underserved communities, minority communities and low income communities,” he said.
The application process should open to all indexes in a few days.
You can read more about PPP loans and loan forgiveness here.
Latham says any business that needs additional help should contact their bank. To apply, they would need to present payroll records, 941 forms, and documents proving they were in business on February 15, 2020.
“Just come in, sit down and talk about the need, as they would with most banker loans. The banker can, based on the information provided, upload a loan application to the SBA,” Latham added. “It’s a pretty straightforward process.
At this point, the Small Business Administration will not be performing same-day approvals.
“We hope that means maybe one day soon, or one day after the approvals are made,” he said of the SBA, which will give the green light to banks to disperse the funds.
Sixty percent of the loan is to be used on salary expenses. If certain criteria are met, he could be fully forgiven.
“The new cycle also includes a slightly expanded use of these funds. Again, more than half is to be spent on salary expenses, but these have in fact been included in some additional categories that the funds can be used for. “
Businesses that received a loan in 2020 can reapply. Latham does not expect to encounter the same issues that plagued the system nationwide during the first deployment.
“The first round was a lot like building a plane while it was in the air, we were getting advice as we went. Fortunately, enough time has passed since the P3 loan program closed in the fall for them to prepare, if you will, in a better way for this next cycle.
In 2020, Alabama banks issued nearly 70,000 P3 loans totaling more than $ 6.2 million. The average loan amount was over $ 89,000 for a business with 10 employees.
“We hope that small businesses will be encouraged to research this,” Latham added. “This is, again, a direct help, hopefully forgiven in most cases for businesses to really help themselves to recover – back to the tables and back to people’s payrolls. who work in these companies, who need this help and who need these jobs. “
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