Wakelaw2006
Well-known member
I think smaller banks were willing to take more risks and submit loan applications to the SBA before clear guidance was issued regarding calculation of the maximum loan amount, not so much that they were just blowing off documentation. It was very unclear as to what documentation was required and how the loan amount was calculated. Yes, it was based on payroll, but what was and was not included for employees making over $100,000 was unclear, what was and was not included in terms of payroll taxes and income tax withholding was unclear and the time period to use to calculate average payroll wasn’t clear (the statue and the regulatory guidance is conflicting). I think the bigger banks were generally less willing to go out on a limb and take a stance on what the correct answers were. And I don’t blame them for it one bit. This Forbes article came out the day before my firm submitted our application and it summed up everything we were struggling with and our bank was struggling with. For the Shake Shacks and Ruth’s Chris’ of the world, this wasn’t an issue because regardless of the calculation, they qualified for the maximum loan amount (setting aside the fact that 500 employee per location rule was ridiculous and nothing that is publicly traded should ever qualify for any programs designed for small businesses).
https://www.forbes.com/sites/anthon...-and-banks-need-to-agree-on-now/#7ec101e81a32
