Get Jumpstart On Next Wave Of Paycheck Protection Program Loans
TAMPA BAY, FL — Hoping to stay afloat during the coronavirus pandemic, more than 1.6 million American small businesses were approved for forgivable loans through the national stimulus $349 billion Paycheck Protection Program.
The PPP was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help small businesses during the pandemic. Unfortunately, it took only days to deplete the funds.
The good news is that Congress may add another $300 billion to replenish the program. Once the funds are approved, they are only expected to last 48 to 72 hours because of the overwhelming demand from small businesses across the country.
According to the National Federation of Independent Businesses, 70 percent of small businesses applied for PPP loans but only two in three businesses (72 percent of those that applied, were successful.
The NFIB Research Center cited pre-screening and an existing relationship with an SBA-approved lender as major factors in the success of those businesses that received loans.
The majority of small business owners (84 percent) who successfully submitted their application already had a checking or savings account with the bank where they applied, said the NFIB.
Most banks that are participating in the program and facilitating these loans are only taking applicants from current customers.
Just under half of successful applicants had an active loan with the bank and another 24 percent had a business credit card associated with the bank.
Only 1 percent of successful applicants applied at a bank with which they had no previous association.
Of the 28 percent of small business owners who were not successful, most of them (68 percent) are waiting for their bank to start accepting PPP loans. Nine percent of them are not able to find a participating bank. Five percent of owners trying to apply for the loan were told by their bank that it had hit its limit of accepting loans. Another 5 percent found the process too complicated to proceed.
Keys to success, according to Fivestars, which specializes in building customers for small businesses, include:
Prepare your payroll and banking documentation. You should have IRS Form 940, 941, 1099-MISC, your bank statements, and a voided check ready. Lenders are prioritizing completed applications that have all the required paperwork attached.
Contact your bank. Find out immediately if your bank is an SBA-approved lender and reach out to find out if they’re taking PPP applications.
Have a back-up plan. If you don’t have an existing relationship with an SBA-approved lender, find one quickly and establish a relationship.
The PPP, however, isn't the only alternative for loans for small businesses hit hard by the coronavirus pandemic.
Economic Injury Disaster Loan
The federal Economic Injury Disaster Loan (EIDL) was expanded and funded through the Coronavirus Preparedness and Response Supplemental Appropriations Act.
According to the NFIB, about half of small business owners have applied for an EIDL loan and another 5 percent tried but the SBA website was not working at the time.
Almost all those who applied for the EIDL loan requested the emergency EIDL grant of up to $10,000. The emergency grant is designed to provide immediate financial assistance as the full loan is being processed.
Of those who applied for the EIDL loan, just 4 percent have been approved and 1 percent not approved. Most applicants of the EIDL have yet to receive an update on the statuses of their application and no small business applicants have received the loan or the emergency grant.
About three-quarters of small business owners found the EIDL application process generally easy, but they are growing increasingly frustrated with the processing of these loans and a lack of communication about when they can expect to receive money if their loan is approved.
Ten percent of applicants found it difficult submitting the application online due to technology issues related to the SBA website and another 8 percent had problems filling out the application.
Small Business Emergency Bridge Loan
More than 1,000 small businesses have been awarded more than $49 million from the Florida Small Business Emergency Bridge Loan, a state-based loan program that Florida Gov. Ron DeSantis introduced on March 16 shortly after the shut-downs due to the coronavirus.
The bridge loan program provides short-term, interest-free loans to small businesses that have experienced economic injury due to the coronavirus closures. Since the application period opened on March 17, the Florida Department of Economic Opportunity said it has received more than 38,000 applications for bridge loans.
However, the deadline to apply was April 13.
Emergency County, City Loan Programs
In the hopes of helping businesses stay afloat during the coronavirus and prepare to return to business as usual, Tampa Bay county and city governments have set up loan programs for small businesses within their jurisdictions.
Among them, this week the City of Pinellas Park opened applications for its Small Business Relief Fund. The funding for this program is limited to 50 local serve fifty local small businesses meeting the program criteria. As of Friday, the city received about 100 applications and will begin reviewing them immediately to determine eligibility.
Due to the overwhelming response, the city will close the application process on April 29 at 5 p.m.
St. Petersburg launched its Fighting Chance Fund April 3 for St. Pete residents who own and independently operate small businesses which have been negatively impacted by the coronavirus orders.
The fund is expected to provide critical support to about 1,000 restaurant, bar, retail, and service-based businesses and their more than 3,000 eligible employees.
The Fighting Chance Fund provides $5,000 grants to impacted eligible businesses and $500 to impacted eligible individuals. Eligibility is defined as:
Small businesses, independently-owned and operated within St. Pete, by a resident of St. Pete, that employs 25 people or less. This includes restaurants, bars, retail and service industries.
Employees who reside within the city limits who have been terminated, furloughed or whose salary has been reduced at least 50% from a restaurant, bar, retail or service-based business that is eligible for the business grant (see above).
To receive funding through this program, each business will be required to clearly share how it will use city funds, in keeping with the program's eligible uses: commercial rent or mortgage payments, utilities, payroll, retention of employees, or employee support programs.
Applications for eligible businesses and employees will be accepted until funds are exhausted.
The Pasco Economic Development Council has partnered with Pasco County to provide a relief grant to small businesses impacted by The coronavirus.
Funded through Penny for Pasco, the Pasco Emergency Business Grant is an emergency grant of up to $5,000 to support small businesses.
This emergency grant is expected to provide support to 400 Pasco County small businesses. The goal of the grant program is to help offset the temporary loss of revenue and help keep small businesses open after the coronavirus pandemic.
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There are limited funds available which will be distributed on a first-submitted, eligible and approved application basis. Pasco County businesses that meet the criteria below are encouraged to submit their applications online as soon as possible.
The Pasco Emergency Business Grant has $2 million available and applications will be accepted until funds are exhausted.
Applicants must be:
Pasco registered business in operation as of March 1
Must be a Pasco County resident
Have 1- 25 employees (part-time and 1099 employees must be included)
Must have applied for federal disaster loan funding
Must be in good standing
For qualifying small businesses in the most vulnerable business sectors of Tampa, the City of Tampa's One Tampa Relief Now; Rise Together program will cover up to $4,000 for rent or mortgage, and up to $1,000 for utilities.
For more information, click here.
Related stories:
St. Pete Sets Up Fighting Chance Fund For Impacted Businesses
Pasco Emergency Grant To Help Coronavirus-Impacted Businesses
City Of Pinellas Park Launches Small Business Relief Program
This article originally appeared on the Tampa Patch
