The application process for the $2.3 trillion in aid provided by the federal Coronavirus Aid, Relief, and Economic Security Act formally opened early on April 3, but it’s not up and running for everyone.
“It’s pretty much a disaster. Most banks are only accepting applications from current customers, which was not really explained ahead of time. What this is in effect doing is blocking a lot of businesses from even being able to apply because their banks are not up and running,” said Eric Reiser, a partner at LoFaro & Reiser LLP in Hackensack. “It’s been very hard to be able to get ahold of the [U.S. Small Business Administration].”
Reiser’s firm is helping 10 clients with their applications for the Payroll Protection Program, the $349 billion plan aimed at helping small businesses get through financial hardship sparked by the COVID-19 pandemic. He likened the PPP application rollout to that of Obamacare in 2010.

PEXELS
“Remember how Obamacare was rolled out and the website crashed immediately because they weren’t prepared for how many people were gong to apply? This is similar. The [U.S.] Treasury Department put an artificial deadline, and the banks weren’t able to get up and running for different reasons,” Reiser said. “I think it’ll take a week or so to get this kind of in line before people can submit applicants, which is a shame because they need the money now. And there’s no guarantee for when the loans will actually be funded.”
Lowenstein Sandler Partner Steve Rogers told NJBIZ that there are “definitely banks who have said ‘you cannot apply today. Even though the portal is officially open, we’re just not ready for it.'”
The SBA released its interim final rule on the PPP Thursday night.
“You know if you’re sitting back in a bank and new regulations come out, you’re going to want to understand them before you do anything,” Rogers said. “The goal was apply at 10 a.m. and get a check at 2 p.m. Maybe that’s happening in parts of the country much less densely populated, but everyone who I have spoken to, which has been six different people who told me they’re ready to go, their particular bank isn’t ready for them. It’s actually oh-for-six.”
Rogers expects next week to be better, however.
“We’ve never done anything like this before. It’s more than double the relief package in 2008, it’s a very ambitious program. It’s not going to happen today as far as I can tell, but it’s a good program,” Rogers said. “It’s like an individual who can’t file for unemployment online because the system is overrun, the banks are overrun. While we can be negative on today, it’s not a criticism of the program.”
George Livanos, a partner at accounting firm Sax LLP, noted that some financial institutions are having a better go at processing PPP applications than others. Larger banks, with better internet infrastructure, are processing them, he said, and some smaller institutions have had their programs ready since earlier in the week.
“A lot of our clients have been put in a queue, meaning the application’s received but doesn’t mean it’s going anywhere other than within that lending institution,” Livanos said. “Everybody realizes that in the SBA guidance, it stipulates a first-come, first-served basis, and everyone’s concerned they’re going to miss out on something.”
For Livanos, Reiser, Rogers, and others, the application process has been non-stop.
“There will be more work tomorrow and Sunday. It’s a seven-day a week process for us. I was on a phone with a client in Florida today, and another client stuck in Peru who’s using us to submit his application. It’s all hands on deck,” Livanos said. “But helping the general public at large is part of the larger responsibility that we have.”