Staff file photo / Kaleena Goldsworthy, owner of The Bitter Bottle, has used a combination of local and federal loans and a grant to keep her new business afloat during the pandemic.

As the application period ends for small businesses seeking cash from the $650 billion Payroll Protection Program and the loan forgiveness process opens, local bankers have some advice: Don't get in a hurry.

"We most likely will go live on Monday, but we're going to encourage our customers to take their time to apply for forgiveness," said Jay Dale, market president for First Horizon in Chattanooga. "There's no rush."

Applications for the federal program officially close this week, though many banks — including First Horizon — have already cut off the process to give them time to push through the last applications before the Saturday deadline. And though the forgiveness applications can begin Monday, federal lawmakers haven't sorted out the final details just yet.

"New guidance is coming all the time, and that's assuming legislation doesn't come out and change it even more," said Colin Barrett, president of the Tennessee Bankers Association.

(Read more: Who got the Payroll Protection loans in Chattanooga?)

Congress is contemplating several measures that could benefit business owners, including automatic forgiveness and no paperwork for loans under $150,000, which would comprise more than 70% of the loans made during the life of the program, said Lynn Chesnutt, director of the Tennessee Small Business Development Center.

Business owners have 10 months from the time they receive the funds to apply for forgiveness and, as it stands, the forgiveness application process is daunting, even using the simplified form for smaller loans, he said.

'There's a lot of verbiage in there that your average layman is just not going to understand," Chesnutt said.

The Paycheck Protection Program in Tennessee

Through July 31, the program had made 97,036 loans in Tennessee for $8.9 billion.

In June, new rules governing the program gave small businesses 24 weeks rather than eight to spend the money, reduced the percentage that must be spent on payroll from 75% to 60%, and extended the repayment period for businesses that don't qualify for forgiveness from two to five years. The rules also gave small business owners until the end of the year to bring back their employees, rather than the original deadline of June 30.

(Read more: Breathing room: Businesses get more time, flexibility to spend coronavirus funds)

But for some small businesses, the program still wasn't the right fit. Kaleena Goldsworthy, owner of the Bitter Bottle, opted instead for a small loan from a city relief fund, an Economic Injury Disaster Loan from the Small Business Administration, and a grant from LAUNCH Chattanooga to keep her fledgling business afloat.

"We're so young in the production stage we're at that we were able to kind of hold of our breath until things improve," said Goldsworthy, who used roughly $5,000 from those sources to keep three contract employees busy shifting her bitters manufacturing business to an ecommerce model. "In a small business, you're grateful for anything you can get."

The Paycheck Protection Program launched April 3, offering $349 billion in forgivable loans to small businesses to help them weather the devastating economic impact of the coronavirus crisis. After less than two weeks, the money ran out, and Congress sent through another $310 billion in funding.

That second round of funding has held up, and about $130 billion remains in the pot. Though money remains available, and there might be another round of funding coming, the program did a good job shoring up businesses that need the breathing room, said Kenny Dyer, Chattanooga market president for Pinnacle Bank.

"I feel like the demand was met," he said. "We had a couple of people that called this week and said 'You know, I guess I should have done that,' but in general the demand was met.

"We loaned $210 million in Chattanooga and made 1,100 loans. That's a lot of people."

Contact Mary Fortune at or 423-757-6653. Follow her on Twitter at @maryfortune.