Updated on May 18.
The SBA Paycheck Protection Program (PPP) has been prominent in the news as a resource for small businesses suffering steep declines in revenues during COVID. The Small Business Administration, or SBA, offers the loans through participating lenders, and will forgive them if a company keeps its employees on the payroll for eight weeks.
As a long-time SBA lender, Self-Help began taking PPP applications on April 6. As of May 17, we had received SBA approval for $161 million in loans to serve 1,184 applicants. Sixty-eight percent of the loan dollars went to nonprofits. Altogether, we helped applicants continue employing 17,000 people.
“SBA loans have been important part of Self-Help’s lending for many years, and we’re happy we could leverage that experience in this crisis situation,” said Tucker Bartlett, Self-Help executive vice president who has been directing our PPP efforts. “It also has been tremendously helpful that we have so many existing relationships with small businesses and nonprofits in the communities we serve. We know the value these companies and organizations bring, and we’re glad to be here for them in a time of need.”
Allocated by Congress to ease the impact of coronavirus social distancing on small businesses, PPP loans can be used for payroll, rent, mortgage interest or utilities. If you want to understand the importance of these funds, ask the small businesses that Self-Help has been able to help.
One owner cried with relief after discovering they were approved. Others who spent weeks seeking help from other financial institutions were grateful for our ability to mobilize and help so quickly.
The great majority of the Self-Help PPP loans are helping organizations in communities where we have branches, including NC, CA, IL, WI, and FL. A majority of the dollars have gone to nonprofits. Demographic data is still being collected but we know one thing for certain: the need is much greater than the available funds.
The issue of who receives PPP loans is receiving increasing attention, as it becomes clear that much of the funding from lenders around the nation has gone to well-heeled companies. Our affiliate, the Center for Responsible Lending, estimates that upwards of 90% of businesses owned by people of color have been, or will likely be, shut out of the PPP. CRL is part of a broad-based coalition of organizations advocating for more PPP funds for businesses of color and smaller entities.
As Self-Help completes the second round of the program, we are maintaining an intense focus on supporting our members, borrowers, tenants, nonprofit allies and small businesses run by underserved communities. We have increased our technical assistance to these organizations by providing tools and guidance over and above what is provided by the SBA.
We will continue to do as much as possible for our applicants, and we appreciate the perseverance of all the small businesses and nonprofits who continue to serve their communities during this difficult time.
If you would like to support our work to lift up communities impacted by COVID-19, please consider opening a term certificate or money market account. Visit us online or contact us at invest@self-help.org.