SBA makes $500 billion in PPP loans to over 3.8 million small businesses during Covid-19
By Brenda Beveridge
As of this printing, the Small Business Administration Administrator Jovita Carranza, along with Treasury Secretary Steve Mnuchin announced that 2.2 million small business loans worth $175 billion have been made in the second round of the Payroll Protection Program to those businesses struggling amid the coronavirus pandemic.
After the initial $454 billion Congress allocated to the SBA ran out in April, lawmakers replenished the fund with an additional $310 billion.
According to the administration, the average size of a loan made under the second iteration of the program, was $79,000.
“The Paycheck Protection Program is providing critical support to millions of small businesses and tens of millions of hardworking Americans,” Carranza and Mnuchin said in a joint statement, adding the average loan size indicated “the program is broadly based and assisting the smallest of small businesses.”
The loan program has been plagued by technical issues and inquiries regarding if lenders were prioritizing the businesses that needed the money most after several wealthy schools and deep-pocketed companies received loans.
On April 29, 2020 the SBA announced that only financial institutions with less than $1 billion in assets would be able to input Paycheck Protection Program applications into the SBA system between 4 p.m. ET and midnight.
SBA also said that they, in consultation with Treasury, would reevaluate to see if more reserved time would be needed for smaller banks to input loans in the future.
“My heart goes out to the LGBTQ business owners have been impacted by the coronavirus. Their resilient and dynamic contributions to our economy are vital. My priority as SBA Administrator is to help as many small business as possible during this time.”
On Thursday, March 26. 2020 The National LGBT Chamber of Commerce welcomed over 800 NGLCC affiliate chambers and LGBT business owners who joined Carranza and her team on how to connect LGBT-owned small businesses with emergency capital and resources during COVID-19.
The NGLCC is the business voice of the LGBT community, the largest advocacy organization dedicated to expanding economic opportunities and advancements for LGBT people, and the exclusive certifying body for LGBT-owned businesses.
For more information regarding LGBTQ business, please visit the NGLCC website at nglcc.org
SBA Products and Resources
SBA is here to assist small businesses with accessing federal resources and navigating their own preparedness plans as described by the CDC’s Guidance for Businesses and Employers.
SBA works with a number of local partners to counsel, mentor and train small businesses. The SBA has 68 District Offices, as well as support provided by its Resource Partners, such as SCORE offices, Women’s Business Centers, Small Business Development Centers and Veterans Business Outreach Centers. When faced with a business need, use the SBA’s Local Assistance Directory to locate the office nearest you.
Access to Capital
SBA provides a number of loan resources for small businesses to utilize when operating their business. For more information on loans or how to connect with a lender, visit: sba.gov/funding-programs/loans.
• 7(a) program offers loan amounts up to $5,000,000 and is an all-inclusive loan program deployed by lending partners for eligible small businesses within the U.S. States and its territories. The uses of proceeds include: working capital; expansion/renovation; new construction; purchase of land or buildings; purchase of equipment, fixtures; lease-hold improvements; refinancing debt for compelling reasons; seasonal line of credit; inventory; or starting a business.
• Express loan program provides loans up to $350,000 for no more than 7 years with an option to revolve. There is a turnaround time of 36 hours for approval or denial of a completed application. The uses of proceeds are the same as the standard 7(a) loan.
• Community Advantage loan pilot program allows mission-based lenders to assist small businesses in underserved markets with a maximum loan size of $250,000. The uses of proceeds are the same as the standard 7(a) loan.
• 504 loan program is designed to foster economic development and job creation and/or retention. The eligible use of proceeds is limited to the acquisition or eligible refinance of fixed assets.
• Microloan program involves making loans through nonprofit lending organizations to underserved markets. Authorized use of loan proceeds includes working capital, supplies, machinery & equipment, and fixtures (does not include real estate). The maximum loan amount is $50,000 with the average loan size of $14,000.
SBA provides export loans to help small businesses achieve sales through exports and can help these businesses respond to opportunities and challenges associated with trade, such as COVID-19. The loans are available to U.S. small businesses that export directly overseas, or those that export indirectly by selling to a customer that then exports their products.
• Export Express loan program allows access to capital quickly for businesses that need financing up to $500,000. Businesses can apply for a line of credit or term note prior to finalizing an export sale or while pursuing opportunities overseas, such as identifying a new overseas customer should an export sale be lost due to COVID-19.
• Export Working Capital program enables small businesses to fulfill export orders and finance international sales by providing revolving lines of credit or transaction-based financing of up to $5 million. Businesses could use a loan to obtain or retain overseas customers by offering attractive payment terms.
• International Trade loan program helps small businesses engaged in international trade to retool or expand to better compete and react to changing business conditions. It can also help exporting firms to expand their sales to new markets or to re-shore operations back to the U.S.
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