Wealth Management
(New York)
New data is out showing which independents are gobbling up the most new recruits in the wealth management space. The overall picture emerging is that while April was a very slow month for changes, Raymond James and LPL are striding ahead of the competition through acquisitions and advisor recruiting. LPL has gotten 59 new recruits to join this year, while Raymond James has managed 20, worth $4 bn and $2.8 bn in AUM respectively. Some usual suspects have been absent so far this year. For instance, Advisor Group has lost more than 25 advisors to LPL in 2020 without announcing a single new advisor joining the network.
FINSUM: LPL and Raymond James have done a great job keeping their recruiting wallets open during this tough time. We expect the relationships they are building right now will keep their pipeline strong for the rest of the year.
The Paycheck Protection Program landscape has been beyond challenging for small business owners. According to COVID Loan Tracker, as of April 30th, only 10.2% of small business owners report actually receiving PPP loans. That compares to the 30% that say they have already received “approval” for the loan by the SBA. That is a huge lag when you are trying to pay employees.
However, for some, that is not even the biggest issue, as just applying itself is a major headache. Not only are the forms one must submit difficult, but many banks won’t let you apply if you are not a customer, so many are stuck in seemingly hopeless queues at giant banks. With that mind, below is a list of sources where you can apply WITHOUT being a customer.
1. COVID Loan Tracker has partnered with Fundera to offer its own PPP app. Applying with online lending platforms like Fundera increases your chances of success because they are connected to a multitude of lenders and only place your application with banks ready to process them. CLT can see in its data that online lending platforms have had very high success rates in getting PPP loans approved.
APPLY FOR PPP with COVID Loan Tracker/Fundera
2. First State Bank: https://1st.bank/ppp/
3. Banc First: https://www.bancfirst.bank/cares/ppp-apply
4. Eastern Bank: https://www.easternbank.com/ppp-request
5. People’s Bank and Trust: https://www.peoples.bank/ppp
6. TCF Bank: https://commercial.tcfbank.com/sbappp/s/application?
COVID Loan Tracker was started by small business owners Duncan and Rita MacDonald-Korth to help their fellow small business owners understand where PPP and EIDL money is flowing. We are empowering the business community and journalists with the data they need to keep the government accountable.
(New York)
In a stat that should absolutely terrify small broker-dealers, a new survey says that for small firms, Reg BI compliance may cost a large portion of your revenue every year. According to the National Society of Compliance Professionals, a small firm with $500,000 in net capital will need to pay $60,000 a year to comply with the new rule. Bigger firms have high costs too—Raymond James will spend $20m up front, and then another $5m per year to comply.
FINSUM: $60,000 a year is a lot of cost to bear for smaller firms, especially because this regulation does not expand business opportunities and will likely only shrink revenue for many.
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As most small business owners already know, the Paycheck Protection Program has been nothing short of a debacle. According to COVID Loan Tracker, still only around 10% of those who applied for PPP have received their money. As this new round of PPP funding arrives on Monday, COVID Loan Tracker has launched a partnership with Fundera to help small business owners apply for PPP.
Generally speaking, it is a very good idea to work with online lending platforms like Fundera, Lendio, and those similar. Their model for processing PPPs has proven quite successful, and we can see it in our data. See why below.
Apply for PPP with COVID Loan Tracker
After vetting several partners, here is why COVID Loan Tracker decided to work with Fundera:
1. Faster and more successful: we can see in our data that online platforms like Fundera had the highest success rates. Your application is offered to many lenders, and placed to one that is ready to process them, so you have better odds of success and faster processing times.
2. Transparency and Communication: PPP applicants will receive updates on a regular basis—this is the most transparent PPP application available.
3. Reputable and vetted: Fundera has good reviews and our founders (Duncan+Rita) personally spoke with their CEO and CTO for due diligence.
4. Pre-applications: you can fill out the application now to have it ready once PPP gets more funding.
One of the key challenges small businesses have faced in this process is not having all the documentation needed to process the PPP application. In fact, CovidLoanTracker.com sees it here through their PPP application: so far only about 50% of businesses who begin the application process actually complete it.
The number one reason for this? They don’t have everything they need.
CNBC has reported the same issue:
“A lack of preparation is one of the most common mistakes that owners made when applying for PPP loans during the first round, says Rob Scott, Great Lakes regional administrator for the SBA.”
So, what exactly do you need to have ready? Here’s a helpful checklist, but let’s break-it-down and try to keep it simple:
• Driver’s license: front & back photos/scans for every person who owns 20% of more of the company
• All the company formation documents you can get hold of: certificate of registration, any operating agreements, anything that gets to how the company was formed and is structured legally
• Tax returns: at least two if not three years of tax returns beginning most importantly with the 2019 return
• Payroll is the and most important trickiest part. So here’s what you should try to get from your payroll service provider:
The last twelve full months of payroll, and then calculate the “average monthly” payroll from that. BUT - some banks are actually asking for that monthly average to be calculated from the calendar year 2019. Our advice? Do both! Have as much ready as possible.
IMPORTANT: what are payroll costs? some small business owners are confused. It’s everything, INCLUDING 401(k) and health insurance contributions (including employer contributions). Quite simply: salary, wage, commission and tips, vacation, medical, parental and sick pay. It ALSO includes payment for group healthcare benefits, including insurance premiums paid. All costs in there. Even payroll taxes!
Mortgage, rent, utility documents, etc: your big ongoing expenses
Proof your business is in good standing
Proof the COVID-19 pandemic has negatively impacted your business
Finally, and often overlooked, check your business credit file and make sure it’s up to date and correct. About 25% of companies have found their business credit files are inaccurate, A good place to check is through Nav.
Preparation is most of the battle - and having all your documents in order and ready-to-go will help you nail the PPP application process.
Let us know how your process goes or if we missed important items that you discover you needed.
Treasury Secretary Mnuchin thinks $310 bn towards a new Paycheck Protection Program will be enough to satisfy remaining demand. We at COVID Loan Tracker think he is sorely mistaken.
The government and the SBA in particular have continually mentioned a figure of around 1 million applications that were in-process but stranded by the first round of the program running out of money. Based on that calculation, the logic for the size of the new program is very simple: if $349 bn funded 1.7 million applications in the first round, then surely $310 bn will fund the remaining 1 million applications that got stranded.
PLEASE HELP SMALL BUSINESS OWNERS BY FILLING OUT THE FORM
Unfortunately, this assumption grossly underestimates the real number of stranded applications because it does not account for “shadow applications”. Many small business owners never had their applications formally submitted to the SBA for an E-Tran number because they were still collecting/correcting/submitting paperwork that was requested by their lenders. Many applicants did submit all paperwork, but because of faulty systems, their applications were never submitted. Both founders of COVID Loan Tracker had this happen to them on multiple application platforms despite applying the first day, and thousands of small businesses have shared similar stories with us.
Because of this,
COVID Loan Tracker believes there are closer to 5m stranded applications—mostly from genuine small business owners who lacked accountants and did not have perfect paperwork at-the-ready. Even counting shadow applications, there are also small business owners who simply did not apply because the money ran out so soon—meaning even more applications are forthcoming. Accordingly, we believe demand for the new round of PPP will be extremely high and that funds will be exhausted in 7-10 days.
COVID Loan Tracker was started by small business owners Duncan and Rita MacDonald-Korth to help their fellow small business owners understand when PPP and EIDL advance money starts flowing. The site works by crowdsourcing knowledge on applications and loan disbursements. Our goal is to help the small business community and empower journalists with the data they need to keep the government accountable.