General COVID-19 talk, NHL remains suspended MOD Warning post #1

[Bandit]

My understanding is that most banks are offering some type of relief on these loans.

And I'm sure circumstances are different for every small business owner, but for many of them, their major expenses are rent, payroll, and inventory.
None of those payments go to banks, and those other businesses are probably counting on this money from the other small businesses to pay their own rent, payroll, inventory, etc.
When there's a huge group of businesses not operating, it hurts everybody.

Rent specifically was what I was referring to. It's going to someone, who either has it free and clear, or (ultimately) to a bank by way of an intermediary.

 

[KINGS17]

I'm not sure why people seem to want to keep pinning small business problems on a state governor. The real blame falls on whoever those people owe money to, which is almost always a major bank. It's not turtles all the way down, at some point somewhere, someone owns all this shit, maybe they could stop being and give people a break?

You are oversimplifying the problem. You think whoever ultimately owns something not getting their money actually solves the problem?

I have no issue with asking banks, etc. who hold mortgages to forego monthly payments for a few months, and extending the length of the mortgage by the same number of months.

 

[Raccoon Jesus]

You are oversimplifying the problem. You think whoever ultimately owns something not getting their money actually solves the problem?

I have no issue with asking banks, etc. who hold mortgages to forego monthly payments for a few months, and extending the length of the mortgage by the same number of months.

Residential mortgages are doing just that.

Commercial leases though...

 

[BigKing]

My bank immediately offered a three month forbearance back in March to all of our clients. We may have to revisit the length of these on a case-by-case basis but we provided them no questions asked right when this started.

Now, a landlord may be getting relief from his mortgage holder but still trying to be difficult with his/her tenant: especially in commercial/retail where the government isn't stepping in to protect like it is with residential tenants.

My wife is a nurse but she also is an aesthetician on the side, renting a room at her sister's office. Her sister's landlord only lowered their rent by 25% even though they have not been allowed to operate the business this entire time. Is that the bank or the landlord? In this case, the landlord has historically been an asshole so it wouldn't surprise me if he is getting relief but also squeezing my sister-in-law.

*edit* For the sake of clarity, my bank does not do residential loans so any forbearance agreements made were on mortgages or standard business loans. Business mortgages made under the SBA 504 program automatically received six months of forbearance on the mortgage held by the SBA which is generally ~40% of the original purchase price.

 

[jfont]

Florida's scientist was fired for refusing to 'manipulate' COVID-19 data

So some of these states are manipulating Covid 19 data. Florida and I read Georgia as the other state. Wow!

 

[KINGS17]

Residential mortgages are doing just that.

Commercial leases though...

Yes, this is why it is not that simple. People have expenses other than rent. How do they pay those bills. I haven't seen utilities stepping up and saying don't worry about paying us. Sure, they won't turn off your power or water now, but they still want their money and your account to be paid in full. Without adequate income to pay employees and their expenses, plus make enough to live on themselves small business owners who rent a commercial space are in financial trouble from which they may not recover.

 

[KINGS17]

My bank immediately offered a three month forbearance back in March to all of our clients. We may have to revisit the length of these on a case-by-case basis but we provided them no questions asked right when this started.

Now, a landlord may be getting relief from his mortgage holder but still trying to be difficult with his/her tenant: especially in commercial/retail where the government isn't stepping in to protect like it is with residential tenants.

My wife is a nurse but she also is an aesthetician on the side, renting a room at her sister's office. Her sister's landlord only lowered their rent by 25% even though they have not been allowed to operate the business this entire time. Is that the bank or the landlord? In this case, the landlord has historically been an asshole so it wouldn't surprise me if he is getting relief but also squeezing my sister-in-law.

*edit* For the sake of clarity, my bank does not do residential loans so any forbearance agreements made were on mortgages or standard business loans. Business mortgages made under the SBA 504 program automatically received six months of forbearance on the mortgage held by the SBA which is generally ~40% of the original purchase price.

If I understand you correctly this only covers those with loans made by the SBA?

 

[Bandit]

You are oversimplifying the problem. You think whoever ultimately owns something not getting their money actually solves the problem?

I have no issue with asking banks, etc. who hold mortgages to forego monthly payments for a few months, and extending the length of the mortgage by the same number of months.

This is what I'm talking about. I'm not suggesting the months just tick off without payment and the loans end at their original term date.

My bank immediately offered a three month forbearance back in March to all of our clients. We may have to revisit the length of these on a case-by-case basis but we provided them no questions asked right when this started.

Now, a landlord may be getting relief from his mortgage holder but still trying to be difficult with his/her tenant: especially in commercial/retail where the government isn't stepping in to protect like it is with residential tenants.

My wife is a nurse but she also is an aesthetician on the side, renting a room at her sister's office. Her sister's landlord only lowered their rent by 25% even though they have not been allowed to operate the business this entire time. Is that the bank or the landlord? In this case, the landlord has historically been an asshole so it wouldn't surprise me if he is getting relief but also squeezing my sister-in-law.

*edit* For the sake of clarity, my bank does not do residential loans so any forbearance agreements made were on mortgages or standard business loans. Business mortgages made under the SBA 504 program automatically received six months of forbearance on the mortgage held by the SBA which is generally ~40% of the original purchase price.

I don't know what your bank is doing, but many banks are offering forbearance terms where you have to pay one lump sum at the end of the agreement to make up the lost payments, which is just flipping ridiculous. Like you suddenly have the last 3 months worth of payments on the first day of the 4th month because... ? It's just another way for the banks to foreclose on people and rip them off.

And yeah for it to work everyone has to pass it on. Landlornds need to get relief from the banks (or whoever ultimate owns the property) and they need to pass it on to their tenants. But a lot of people won't do that, because as I have mentioned here many times, most people are f***ing garbage and should be tossed into the nearest volcano.

 

[Lt Dan]

There was another article I saw earlier about a man driving 60 miles to get a haircut. Personally, I'd rather wait, but to each their own.

pro tip
buy a pair of the clippers made for pets. They are literally the same parts just more durable and are less money and they are in stock

buzz with a 1 or 2

I went from

to

in 20 short minutes. It really felt good to clean the neck up and my fitted hats suddenly fit again

 

[Ziggy Stardust]

That's some great advice, Lieutenant Dan.

 

[Raccoon Jesus]

Yes, this is why it is not that simple. People have expenses other than rent. How do they pay those bills. I haven't seen utilities stepping up and saying don't worry about paying us. Sure, they won't turn off your power or water now, but they still want their money and your account to be paid in full. Without adequate income to pay employees and their expenses, plus make enough to live on themselves small business owners who rent a commercial space are in financial trouble from which they may not recover.

Those are tough too because that's city to city. Mine has been very flexible but I doubt that's the norm. And my car payment reached out to ASK for forbearance (assuming they get interest on the other side haha). Agreed it's not that simple at all--so many niche situations.

 

[Lt Dan]

That's some great advice, Lieutenant Dan.

I almost did a fist bump pic here. How dare me.

here we go

Yes, this is why it is not that simple. People have expenses other than rent. How do they pay those bills. I haven't seen utilities stepping up and saying don't worry about paying us. Sure, they won't turn off your power or water now, but they still want their money and your account to be paid in full. Without adequate income to pay employees and their expenses, plus make enough to live on themselves small business owners who rent a commercial space are in financial trouble from which they may not recover.

yes
the dominoes
they will fall
like fishing boats in Bayou La Batre during a storm

 

[BigKing]

If I understand you correctly this only covers those with loans made by the SBA?

No. The SBA 504 loans received auto relief from the portion held by the SBA, i.e. the 2nd mortgage. A standard 504 loan sees the buyer put down 10%, the conventional bank providing a loan of 50% in first position and the SBA providing the remaining 40% on a 2nd loan. These are for owner/user properties and not investments so the idea here is that the mortgage is paid by the holding company that is owned by the owners of the business that pays rent to the holding company in a pocket-to-pocket scenario. The SBA automatically providing forbearance on 504 loans is really in support of the operating business and not a landlord in the normal sense since they are one in the same. The 1st mortgage, however, is held by a bank and does not receive automatic relief: the borrower would still have to request it.

As for my bank, the forbearance on any conventional loan is tacked on to the end of the loan so there is a balloon payment v. Month 4 being a larger payment. At least for us, commercial real estate loans rarely ever have a maturity that matches the amortization with the latter being 25 years v. an actual loan term of 10 years. Most borrowers won't give a shit about the payments being tacked on to a future balloon payment that is already going to be there anyways and is one that they won't make out-of-pocket because they will simply refinance at that time or, more than likely, prior to that point.

It is funny that we have a client that has eight different entities that all borrower from us. As an aside, a real pain in the ass to underwrite. Anyways, he received a PPP loan for each entity. We have a $5MM loan with each entity as a co-borrower that is collateralized by several converted SFRs that are operated as assisted living homes. Well, he wants to use 25% of his PPP funds on the mortgage interest and have the government forgive it. No problem except he jumped on forbearance so he isn't actually making any payments during the time he has his PPP funds so now he can't use that portion of the PPP deal to his advantage. Now we need to wait and see if he decides to rescind the forbearance and what kind of headaches that causes for us.

 

[KINGS17]

pro tip
buy a pair of the clippers made for pets. They are literally the same parts just more durable and are less money and they are in stock

buzz with a 1 or 2

I went from

to

in 20 short minutes. It really felt good to clean the neck up and my fitted hats suddenly fit again

So you went from a lonely hippie in a wheelchair, to having an Asian fiancee and new legs? All that with a pair of pet clippers. They are life changers.

 

[Rumpelstiltskin]

More potentially good news: Bloomberg - Are you a robot?

 

[Lt Dan]

So you went from a lonely hippie in a wheelchair, to having an Asian fiancee and new legs? All that with a pair of pet clippers. They are life changers.

Just like the lottery, you can't win it if you aren't in it!

 

[jfont]

I'm just in it for the ice cream, Lt Dan

 

[KINGS17]

More potentially good news: Bloomberg - Are you a robot?

This is good news, at least for the current strain. Viruses are always mutating though, so who knows in the long run.

South Korea and Taiwan have been all over this thing and are doing a great job. Of course, they had a bit of a head start as they never bought into the bill of goods China and the WHO were selling.

 

[KINGS17]

Meanwhile, this news is problematic.

Vaccine experts say Moderna's Covid-19 data leave big questions

 

[Bandit]

I almost did a fist bump pic here. How dare me.

here we go

yes
the dominoes
they will fall
like fishing boats in Bayou La Batre during a storm

Fishing??? Don’t you mean SHRIMPIN’?????

 

[Matt13]

It is funny that we have a client that has eight different entities that all borrower from us. As an aside, a real pain in the ass to underwrite. Anyways, he received a PPP loan for each entity. We have a $5MM loan with each entity as a co-borrower that is collateralized by several converted SFRs that are operated as assisted living homes. Well, he wants to use 25% of his PPP funds on the mortgage interest and have the government forgive it. No problem except he jumped on forbearance so he isn't actually making any payments during the time he has his PPP funds so now he can't use that portion of the PPP deal to his advantage. Now we need to wait and see if he decides to rescind the forbearance and what kind of headaches that causes for us.

I own a small business. I have been banking with BOA for a couple of years now. Its a convenient relationship, but not a real relationship by any means.

I applied for the PPP loan and sat waiting for a response from them and never got anything from them as the first round of funding ran out. The second round kicks in and I start applying at a bunch of different banks, including Kabbage online. Within a week I was approved and got funded two weeks ago.

Today, I finally get an email from BOA stating I am declined. What a joke of a response from them.

 

[KINGS17]

I own a small business. I have been banking with BOA for a couple of years now. Its a convenient relationship, but not a real relationship by any means.

I applied for the PPP loan and sat waiting for a response from them and never got anything from them as the first round of funding ran out. The second round kicks in and I start applying at a bunch of different banks, including Kabbage online. Within a week I was approved and got funded two weeks ago.

Today, I finally get an email from BOA stating I am declined. What a joke of a response from them.

I would be willing to bet Bank of America didn't even give more than a cursory look at your application. You simply are not a big enough fish for them to worry about losing your business. This sucks, because it was not the intent of the legislation. Once again, we don't have legislators writing the actual legislation. Instead, we have lobbyists for the banking industry writing the legislation, and you can be sure it included the maximization of their loan origination fees.

Happy to hear you received your loan, and hope it is 100% forgiven if you put it toward the intended use.

 

[BigKing]

I own a small business. I have been banking with BOA for a couple of years now. Its a convenient relationship, but not a real relationship by any means.

I applied for the PPP loan and sat waiting for a response from them and never got anything from them as the first round of funding ran out. The second round kicks in and I start applying at a bunch of different banks, including Kabbage online. Within a week I was approved and got funded two weeks ago.

Today, I finally get an email from BOA stating I am declined. What a joke of a response from them.

I'm glad you received your loan! Your experience with BofA is not unique, nor is it unique for many clients of the bigger banks. They have such a market share though that disgruntled clients that leave due to PPP will just be replaced. This is a real opportunity for smaller banks like mine to really speed up organic growth due to how we responded. Of course, the economy being in the toilet isn't going to help matters but we're all hoping it isn't a long recovery.

We did around 350 of these loans in a month and a half. We did 100 total loans all of last year. It was a pretty herculean effort and the forgiveness portion of it is going to be extremely demanding as well. Our existing clients that bypassed the more convenient and cheaper big banks to bank with us were rewarded for their loyalty by basically receiving their place in line for PPP on day one of the program since we had people working around the clock to enter everything by hand.

If you have any questions about the loan, PM me. I have no problems helping out if I can. Been sending the recently released forgiveness application to my clients and answering questions on that bad boy.

 

[Matt13]

Happy to hear you received your loan, and hope it is 100% forgiven if you put it toward the intended use.

Hookers and Blow?

 

[Matt13]

I'm glad you received your loan! Your experience with BofA is not unique, nor is it unique for many clients of the bigger banks. They have such a market share though that disgruntled clients that leave due to PPP will just be replaced. This is a real opportunity for smaller banks like mine to really speed up organic growth due to how we responded. Of course, the economy being in the toilet isn't going to help matters but we're all hoping it isn't a long recovery.

We did around 350 of these loans in a month and a half. We did 100 total loans all of last year. It was a pretty herculean effort and the forgiveness portion of it is going to be extremely demanding as well. Our existing clients that bypassed the more convenient and cheaper big banks to bank with us were rewarded for their loyalty by basically receiving their place in line for PPP on day one of the program since we had people working around the clock to enter everything by hand.

If you have any questions about the loan, PM me. I have no problems helping out if I can. Been sending the recently released forgiveness application to my clients and answering questions on that bad boy.

I'll reach out. This whole series of events has seen me support more and more local, mom and pop shops than the big boys.