With the U.S. economy struggling through the impacts of the COVID-19, Congress passed a broad Coronavirus Relief Act that went into law at the end of 2020, which included $284billion in funding for a second round of the Paycheck Protection Program (PPP).
These funds are now being released, providing a lifeline to businesses, nonprofits, faith-based organizations and those who are self-employed, to get through these difficult economic times.
PPP, first introduced in 2020 as part of the CARES Act, provides businesses with “forgivable” loans, which will not have to be paid back if funds are used as outlined by the SBA to pay wages, rent, utilities, and other specified expenses.
Businesses can apply for a PPP loan, whether they received funds in the first round or not. And unlike traditional loans, qualifying for this program is not based on the borrower’s credit-worthiness, and there is no collateral or personal guarantee required. To qualify, businesses needed to have been operating before Feb. 15, 2020, and be within SBA PPP size guidelines. It is available to businesses that have employees and those that don’t, including independent contractors. It is also open to non-profit and faith-based organizations.
Many small businesses, especially minority/women-owned,did not take advantage of the PPP during the first round. It’s been well documented that minority-owned businesses, in particular, participated in PPP at a much lower rate than the rest of the country, and were often among the last to get PPP funds. This, despite the fact that African-American and Latino–owned businesses were among the hardest hit by the pandemic.
A lack of program awareness or misconceptions about eligibility were factors driving low participation. Limited access to banks offering PPP was another primary driver cited in a study conducted by the Brookings Institute, noting a reduction in community banks serving minority communities and a higher level of underbanked business owners.
This fact resonated with Damon Maletta, CEO of AdessoCapital, a business loan brokerage house, that has been helping businesses access capital since 2007. “During the first round, our existing clients approached us because they couldn’t find a bank that would take their application,” said Maletta. “Most banks were not equipped to process such high volumes of applications and didn’t have the capital, so they restricted applications to existing customers.”
Recognizing the significant impact of the COVID-19 Pandemic, the nonprofit “Give to Change” Foundation (GTCF) is quickly ramping up efforts to break down these barriers and help small businesses, nonprofits and faith-based organizations across all communities gain access to this program.
GTCF was launched by the Emmy award-winning GIVE TV creators Gary Reeves and acclaimed actor Blair Underwood to continue the philanthropic mission of this innovative television show currently appearing on Discovery Channel (OWN).
GTCF is partnering with Adesso Capital to help provide these organizations with streamlined program information, access to a leading SBA-Certified bank, a straight-forward online application, and a PPP helpline with experts who can help applicants with any program or application questions they may have.
This is all available to applicants at absolutely no cost, and accessible at www.giveppp.com. There you will find more details on program eligibility, how much money your business will qualify for, and program forgiveness.
A criticism of the PPP during the first round was that most of the funds went to large companies. Several changes made in this round, including reduction in the maximum loan amount from $10 million to $2 million, and a set-asides for minority-owned businesses will allow funding to go further and reach those that need it most.
However, funding is still limited and available on a first-come,first-serve basis and may be allocated before the program expires on 3/31/2020. Therefore, small business owners are encouraged to apply right away.
For PPP program details, online application, and access to the Give/Adesso PPP Helpline, go to www.giveppp.com.