January 8, 2021
The smallest businesses, those from low-income communities, and minority, veteran and woman-owned companies—many of whom may have been shut out of the first round of PPP—should see more help in the latest $284 billion Paycheck Protection Program. New guidance from the SBA puts an emphasis on smaller lenders and borrowers as it attempts to address the concerns around barriers to capital that plagued the first tranche.
Expected to begin the second full week of January, round two of PPP sets aside $105 billion in funds for first-time and smaller borrowers, those in low- and moderate-income communities, and for community and smaller lenders. Additionally, these smaller community financial institutions, often focused on helping underserved populations join the economic mainstream, will have access to the PPP loan portal days earlier than larger banks.
This is good news for small businesses, especially those in communities hit hardest by COVID-19 yet missed out in the first PPP funding. These communities – and the businesses, families and individuals who live and work there – can’t afford to wait. Data show that the first time around, the PPP failed to reach underserved areas, particularly in the critical first few months of the program. Countless small businesses, especially minority-owned companies, were left waiting. Upwards of 100,000 small businesses closed permanently due to the pandemic. And even as the labor market slowly recovers, almost 11 million Americans are still unemployed.
We know, through our work in these communities and with businesses that have great ideas and talent but little access to capital, that the right resources and support can lead to stabilization and growth. This next round of funding can’t come soon enough for business still struggling to keep the doors open and paychecks flowing.
As we did in the first round, we have been working hard to ensure that as many small businesses as possible have access to this critical funding. Our banking partner, First Bank of the Lake, has created an online portal to help businesses secure their place in line when the second PPP opens. As a small bank and community financial institution, First Bank of the Lake will be able to make PPP loans sooner than large banks, facilitating quicker access for smaller businesses.
For questions, or to access the online portal, click here.
