Bobby Watson, co-owner Hoot Judkins Furniture in Redwood City, Calif., wants to share his loan application experience with other Home Furnishings Association members. Since March 17, the business has been open only for “contactless shopping by appointment. Contactless pickup and delivery available.”
On that day, Watson also launched his effort to secure a loan through the Small Business Association. This is his account:
March 17: We applied for the SBA Economic Injury Disaster Loan.
April 2: Our application was assigned to a specific SBA loan specialist and we were able to communicate with him, on a timely basis, via email and phone calls. He asked for and was provided various other information and documentation.
The second loan application
April 3: We applied for a Paycheck Protection Program loan directly through Bank of America.
April 5: We were notified by email that our loan was approved. We were loaned an amount equal to 90 days’ worth of historical operating expenses. It’s a 30-year loan, with payments deferred for 12 months. The interest rate is 3.75 percent, with no prepayment penalty. we were told that we could contact the SBA in the coming months to request an increased loan amount, but that would require a deeper investigation of our finances.
April 6: Bank of America requested all of our supporting documentation for the PPP loan application.
SBA case manager calls
April 7: I received a call from an SBA case manager. She provided me with her contact information and explained that she was available to answer any questions about the funding process. She said we should expect loan documentation in the mail in three to five days, possibly sooner via email.
About two hours later, we received an email that our loan documents were ready to be downloaded from the SBA site. There were about 30 pages of information that needed to be reviewed. The language was clear and easy to understand. Many signatures were required of the president, vice president and secretary of our corporation. We were required to make a UCC filing with our Secretary of State’s office (done online).
Documents and more documents
April 8: The entire package was scanned and emailed to a specific email address. We were told that an initial $25,000 would be funded (electronically) within three to five days. The original “wet signed” documents were express-mailed to the SBA. We were told that the remaining amount of the loan would be funded (electronically) within three to five days of receipt of the original documents (assuming we did everything correctly).
April 11: The loan officer at the SBA was funding the loan today. She said it takes three to seven days for the funds to clear into our account. We got another call from Bank of America asking if all of the supporting documents for my PPP loan were uploaded. This was a duplicate call to the one I had previously received.
April 14: The funds were in our account this morning. Exactly four weeks from the day we applied. Still no word on the PPP.
‘An enormous relief that funding has come through’
“It’s an enormous relief that our disaster funding has finally come through,” Watson said April 14. “Hopefully, our PPP loan is not too far behind. We believe that the government assistance we have received will ensure the employment of our staff and the continuing operations of our store. Of course, there is still much uncertainty facing us … like when can we actually reopen? Under what conditions? And how soon will the customers come back to us?
“It’s very encouraging that even though we eliminated 95 percent of our advertising, our website has only seen a 40 percent drop in visitors. There is still a significant demand for our products. People are just waiting for our doors to open.”
Update: Since this was originally posted, the Economic Injury Disaster Loan program ran out of funds. It was subsequently infused with more money but as of April 29 is not accepting new applications because current applicants are expected to deplete available funds again.
[Loan program urgently needs fixes, HFA tells leaders]
[Economic Injury Disaster Loan application]