The FNB Blog

Wednesday, May 18, 2022 / Categories: Business Banking, The FNB Difference

FNB Dream Maker Podcast: SBA, PPP & EIDL Oh My! Brandon Mumgaard

In this week’s episode of the Dream Maker Podcast, we interviewed Brandon Mumgaard. At FNB, we know Brandon as the Small Business Administration (SBA) guru. Currently working at the Garden City branch, we invited him on to discuss the many options available to businesses from the SBA.

Join us in the conversation or read the summary below as we cover the SBA and their two main programs: PPP and EIDL loans. We’ll show you everything you need to know about these programs and how to navigate them.

What You Need to Know About SBA

When lockdowns swept the nation, SBA loans became a vital component of keeping businesses alive. Since some banks weren't yet set up for SBA loans, FNB started getting referrals from competing banks.

Within the first 14 days of these new offerings in place, the SBA processed 14 years’ worth of loans. That’s how heavy the demand was for them at the time.

Why the PPP Program was Vital for Businesses

When asked about the importance of the PPP program, Brandon Mumgaard had this to say:

I don’t think there’s any question that, if we did not have the PPP program, we would see a surge of businesses locally and nationally going out of business.

Further, he stated that everyone from sole proprietors to large corporations has expressed that they could not have gotten through this without the help. The PPP program has been one of the largest government initiatives to date and its impact has been huge.

SBA can now do this with turnarounds of around 2-3 days for approval. While it hasn’t always been smooth, the process has calmed significantly and is now easy to navigate for businesses with a need.

Navigating the Paycheck Protection Program (PPP)

One of the biggest ways in which Brandon has stepped up at FNB was in the handling of PPP loans. Brandon described the time as being the “busiest and most overwhelmed” he had felt in his 10 years in the business.

Congress announced the plan to the public with the news that they could start applying in a rapidly short timeframe. The SBA’s website crashed on day one and applications just started piling up from there.

Since businesses were hurting already and they were unsure of how long the process would take, everyone wanted to get in as soon as possible. The first two days were chaotic but eventually leveled off.

The result of the PPP is an increase in the ability of business owners to have confidence in their business and their ability to run it. If they were unable to make this money, they may struggle to even find a footing. While it isn’t over, this has been a tremendous help for many small businesses.

Info on Economic Injury Disaster Loans (EIDL)

Another form of assistance came from the Economic Injury Disaster Loan (EIDL) program. These were programs that were long in place but SBA revamped them for Covid specifically. Through this program, businesses could receive up to $10,000 in advance after their application approval process.

At the start, companies were eligible for a loan of 6 months of working capital. This would have a 30-year maturity, no interest for 12 months, and low-interest rates after that.

Commercial and agricultural customers are both eligible and filing takes only your 2019 tax return. EIDL loans are almost too easy to apply for now. Some receive funds within a few days of applying.

Other Loan Options for Small Business Owners

Entrepreneurs can also take advantage of the Business and Industry (B&I Program), Main Street Lending Program, and other resources. Here’s a high-level overview of these:

  • BNI – This one comes from the USDA with a focus on working capital. It acts similar to the PPP overall, assisting with things like payroll, benefits, and salary. Companies can also use it for inventory/supplies and interest payments and it comes with a ten-year maturity.
  • Main Street Lending – This one is for companies with up to 10,000 employees. While it's not yet available, we're applying to be an official lender. With these, loan amounts are typically 6x your EBITDA (Earnings before interest, taxes, debt, and appreciation.) The Repayment period is 5 years, including two years with no payments.

The Best Part of the Job

Helping sole proprietors and other businesses through financial hardships has been one of the most rewarding elements of the job for Brandon. While he hates that it’s something everyone has gone through, he loves that he gets to help keep the lights on for so many people.

Whenever financial assistance is possible, you should fight to get it! Contact us online or stop by the bank for some assistance in applying for these programs or any other ones that may be out there. And don’t forget to check out other episodes of the Dream Maker Podcast for more financial advice!

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