Declines and denials are the new norms. In recent months fraud has hit an all-time high within the agency. To aggressively combat this issue, all applications to date are rejected until proven approved. Whether a business qualifies or not, all are declined. 

Here Is Why The Small Business Administration (SBA) Turn Down Disaster Loans:

1. Credit History:

• Credit Score less than 570
• Bankruptcy must be discharged
• No credit profile
• Fraud alerts on credit reports

2. Unvalidated Information:

• Businesses after January 30, 2020, do not qualify
• No evidence supporting the life of your business
• No SSN
• No credit profile reporting even if the score is over 570
• Validation of business address
• Invalid bank account or bank account unsubstantiated
• Citizenship

3. Unsubstantiated Economic Hardship:

• Gross funds claimed cannot be proved
• Cost of goods break-even or cause red zone

Ros DiMere Understands How The SBA Process Works:

The Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP) have been notorious for setting record highs as the number one business lender in 2020. Some of whom would have never received a traditional business loan from a traditional bank has now received ‘stated’ hundreds of thousands and millions of dollars. 

These are unprecedented times for unprecedented measures. While the EIDL loan programs have been good to a host of businesses, other businesses have not been as successful.

When the EIDL program began, the process was filled with glitches, system shut-downs, breakdowns, and software crashes; sometimes would last for days.  Most occurred from the software’s inability to receive massive volume simultaneously. During the first week, Marcia Meredith encountered the system 80,000 shy of 500,000 applications. On April 4, 2020, there were 2.5 million applications in the system. Meredith watched, then studied the apps, ratios from day one from 420k until the numbers soared passed 14 million applications and counting.

What should have taken seven days according to the post-submission messages in phase one took three weeks to complete for the recipient to receive the initial advance. As the process continued to be unstable, Meredith can attest the post messages changed from one day to the next. The workload was more than the SBA anticipated. While the rest of the country was laying off and closing their doors, the SBA was in a hiring frenzy to meet the demand. 

July 2020, the system is running flawlessly.  All bugs and glitches have mostly vanished. The SBA can now meet the demand with a ready workforce and are yet still hiring, creating new departments, and customer service has upgraded to tiers I and II granting authority to speak based on grade to assist applicants. While all upgrades have been a great addition to meet the demand, the disadvantages came at a cost to hardworking legitimate businesses that truly need financial assistance. The approval and funding went from three weeks to seven days, then to forty-eight hours almost overnight.

However, due to the new fast-paced process, fraud occurred in a big way. The system moved too fast to mitigate risk. Millions of dollars are gone to fraudsters. When mentioned earlier, “all businesses are rejected now,” they all are. Rejection is the SBA resolve to combat fraud to fund and approve legitimate businesses after the businesses prove its life, legitimacy, and legality.  The process has gone from stated to documented.  

How Ros DiMere Got Them Overturned:

As April 2020 ended and May began, half of Ros DiMere’s client’s applications had been funded while the other half had been stuck in cyberspace. None of the applications were funded in the order received according to their application number; funding was random, completely out of sync.

After Ros DiMere’s constant advocating on behalf of the unfunded clients, the SBA created a resubmission link that Meredith “would love to take credit for proudly.” The newly created link afforded applicants to receive a re-entry into the system, in which a few of those applicants did finally receive funding. “I am only aware of the honorable business owners who were transparent with their business details. Not all reported post receipt of their funds”, stated Meredith. 

Simultaneously, the decline letters were being sent when they should not have as the “EIDL Advance” was available to ALL Applicants without prejudices purportedly. When thought the work was starting to be over; the real workload was beginning. Advocating for the unfunded expanded into advocating for the rejected, declined, and denied, thus now the priority. Serious fighting and advocating began. The process was to:

1. Review the application, determine the specific rejection reasons and why
2. Overcome the challenges
3. Reconsider
4. Approve
5. Fund.

This process turnkey from start to completion on a good day may have taken from one hour to a max of 72 hours. The file with the most challenges took nearly 60 days. 

However, Ros DiMere Inc’s data can advise exactly when, where, and time of day the numbers drove in like a freight train without brakes “sorry Pelham 123” and “the what” was occurring during that time period that affected millions of applicants.

During July 2020, a new department, RECON, was created solely to review declines, reconsider applications, and overturn the rejection.  RECON stands for reconsideration. After a business has been declined, that business has up to 6 months to challenge the decision, rectify the issue, and resubmit for review and reconsideration. After submission for reconsideration to the RECON department, the turnkey for a final decision can take 60 to 90 days. The RECON department has been backlogged nearly one million-plus applications since day one, with thousands of applications adding daily to its existing queue.

Since October 2020, the RECON department’s production has inclined to reduce the wait time down to 30 days before receiving feedback. As time goes and the files are attended to, the turnkey will continue to reduce.

For more information, contact Ros DiMere Inc at 832-412-2140 or visit www.sbadefault.com.