In Texas, the nonprofit PeopleFund said it has received interest from 600 small businesses, more than the approximately 400 PPP loans it made last year. California-based lender Clearinghouse CDFI got about 160 applications seeking loans totaling $12 million through Thursday, compared with $7.5 million last year, Chief Executive Officer Doug Bystry said.
In Mississippi, Renaissance Community Loan Fund had 34 applications lined up by early this week, which CEO Kimberly LaRosa said showed strong interest.
If the trend continues across the nation, it could go a long way to propping up up minority-owned businesses that saw severe declines last year.
In tiny Camilla, Georgia — once a hotbed of Covid-19 infections along with nearby Albany — Lizzie Hawkins and her husband were among the many African Americans who missed out on a PPP loan last year after confusion over whether they qualified. A local outbreak blamed in part on a local funeral created a climate of fear in the community of about 5,000 people.
Now the couple, who run a small lawn service, are eager to get government relief.
“We lost so many people that we know, people in our church, people that we associate with in our community,” said Hawkins, who was finishing up an application for a PPP loan on Wednesday. “I’m trying to scramble at the last minute to get the information in.”
The new round of PPP didn’t see anything like the chaos and confusion that mired the initial round last April at the onset of the pandemic, when funds ran out in just 13 days and million-dollars loans went to larger businesses. But this week still had its challenges, lenders said, mainly because the Small Business Administration has made changes to its application portal and only provided guidance about the relaunch on the Friday that preceded Monday’s rollout.
“Lenders are in a tough spot,” said Dan O’Malley, chief executive officer of Numerated Growth Technologies Inc., a lending platform used by banks and community lenders. “They didn’t have much time to answer questions, look at the applications, think about the programs.”
The SBA started reopening the program on Jan. 15 to traditional banks with with assets of $1 billion or less and is allowing all other banks to participate beginning Jan. 19. The loans are forgivable as long as long as 60% of the proceeds are used for payroll costs.
“SBA, in consultation with Treasury, is working around the clock to fulfill this Congressional desire to see funds flowing to America’s small businesses as quickly as possible,” the agency said by email.
Amid increasing Covid-19 infections and tighter regulations from local and state governments, there’s evidence of pent-up demand from small businesses seeking a second PPP.
About 96% of the about 5,000 applications Numerated Growth Technologies received on its platform were submitted by people who had already received loans, O’Malley said. Only a handful were for businesses going through community financial institutions, he said. O’Malley expects to have between 50,000 to 100,000 loan applications in the queue ready to be sent to the SBA by the end of the week.
At Southern Bancorp, an Arkansas-based community development financial institution, 20 of the 27 PPP loans submitted into the SBA’s new system on Jan. 13 were paid to people who had already received loans.
“A lot of farmers have shown interest, so we expect their numbers to grow,” said spokesman Nathan Pittman.
Last year the PPP program delivered an outsize number of loans to predominantly White parts of the country in its first two weeks, leaving firms in mostly Hispanic and Black areas to wait until a second tranche of funds was made available, according to an analysis of SBA data.
“In a devastating confluence of factors, businesses owned by people of color — and the communities that depend on them — were overlooked, deprioritized, and excluded,” said Napoleon Wallace, whose North Carolina firm, Partners in Equity, provides capital to minority businesses. “This time around it was really smart to have a portion of it centered around those community-based organizations.”
Opportunity Finance Network, a CDFI trade group, said the head start in the new round may be of little help to marginalized and tiny businesses and their lenders, who will likely need extra time to evaluate the potential benefits of applying for a PPP. Still, it also praised the SBA’s decision to reserve funds for the most vulnerable firms.
“A rocky rollout of this round of lending does not mean funds will not reach targeted businesses,” OFN said in a blog post.
Credit: Source link
