The good news about the new $5 billion of Paycheck Protection Program (PPP) funds approved by Congress in December is that Congress made some favorable revisions just to help small businesses and businesses owned by people of color.
The program includes a new loan and forgivability terms, a reduced maximum loans size — making the loans more appealing to smaller businesses versus larger ones. They also set aside some of the dollars for community lenders and small businesses with 10 or fewer employees.
Applications are being accepted through March 31, or until funds run out.
The changes — intended to level the playing field for underbanked businesses, which are disproportionally Black- and brown-owned — are a step in the right direction. However, many Black small business owners started their businesses out of their savings or with help from families and have little if any familiarity with applying for loans; their relationship with their bank is often limited to making deposits and even then, often just in time to cover their expenses.
PPP application assistance
The Small Business Development Centers (SBDC), funded by the Small Business Administration, are available to assist small businesses; there's an office in every state. While they won’t prepare your package for you, they’re available to provide some assistance.
Jack Harwell, a small business consultant with the SBDC located at Johnson County Community College, suggests business owners start by visiting the Kansas Small Business Development Center website.
The site has a wealth of information on COVID-19-related funding and federal programs. Kansas SBDC has also established a call center to help answer questions about PPP. That number, staffed seven days per week, is (800) 949-7661. If you have questions beyond what the call center can answer, business owners can set up a one-on-one session with a counselor.
"We help them understand what they need, but we don’t provide hands on help [to complete applications]," Harwell said. “We talk through what they need. However, the banks are the interface for the PPP and they all have their own process.”
Wayne Bell, director for SBA’s Wichita district, encourages all business owners who need assistance with applying for a PPP loan to reach out to his office by email or through its website.
“The Wichita District Office has staff available to assist business owners with questions and we remain available to help,” said Bell. “Additionally, we are conducting webinars, virtual meetings, and calls with lenders daily to keep everyone abreast of the PPP program and other SBA resources.”
To find out more about their webinars and virtual meetings you can call the Wichita office at (316) 269-6616.
In addition, similar to the Kansas SBDC, the SBA has a large amount of information on the PPP program, and others, on their website.
All SBDC and SBA services are free.
Finding a lender
Community Financial Institutions (CFIs) were given early access to the latest round of PPP loans. CFIs can include Community development financial institutions (CFDIs), Community Development Corporations, and micro-lenders. CDFIs, which can be credit unions, banks, micro-loan funds, or venture capital, specialize in financing to underserved communities and businesses — including nonprofits.
When the new PPP programs opened on Jan. 11, CFIs were first in line. The program opened up to additional lenders the following week. More than 60,000 loans were approved that first week.
While the SBA maintains a list of bank that are participating in the PPP program, they don’t have a list of CFIs participating in this round of funding, since the decision to participate is up to the lender. Some lending institutions that participated last year are not this time around and lenders that participate can stop at any point.
If you’re really looking for a lending institution to work with, both Bell and Harwell suggest using SBA’s Lender Match Program, an online program that matches lenders to the borrower's needs. Since the SBA is focused on assisting disadvantaged business owners, the program should be able to help make appropriate matches.
You can find eligible lenders participating in this round of PPP loans here.
Bell notes that PPP applications are due by March 31, but funds could run out before then.
“Currently we are seeing significant activity across the state with over 9,500 loans done so far,” he said.
This story was produced by The Community Voice as part of the Wichita Journalism Collaborative, a partnership of seven media companies, including KMUW, working together to bring timely and accurate news and information to Kansans.
