SBA launches tool to help underserved businesses get PPP financing by June 30 deadline
Lender Match sends your basic information to small lenders offering PPP loans in your area.
The SBA Friday announced it has rolled out a tool to help small businesses and nonprofits connect with Paycheck Protection Program (PPP) lenders that specialize in working with underserved business owners.
The SBA’s Lender Match tool can help your business connect with alternative lenders that offer PPP loans, such as Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), Farm Credit System lenders, Microlenders and other small lenders.
The PPP is a federal coronavirus relief program designed to help small businesses keep employees on payroll. Loans are available up to $10 million until June 30, 2020, based on your business’s payroll expenses. Businesses can qualify for up to 100% forgiveness on the loan if they spend 60% of the funds on payroll costs over 24 weeks after receiving the loan.
Businesses can still use the rest of the funds to cover other costs, like renovations required to reopen according to government standards.
Connecting underserved communities with forgivable loans
“The SBA is focused on assisting eligible borrowers in underserved and disadvantaged communities and connecting them with forgivable PPP loans, especially before the June 30, 2020, application deadline,” SBA Administrator Jovita Carranza said in a statement.
Over 4.5 million small businesses have received a loan through this program as of June 6, 2020. But only 1.23 million received them through small lending institutions, according to data on PPP approvals released by the SBA. And just over 186,000 of these loans came from CDFIs and MDIs.
CDFIs and MDIs are nonprofits that typically offer additional services to help small businesses in economically disadvantaged communities find funding. They also often help businesses with owners who have traditionally been left out of the lending market — such as BIPOC-, women- and veteran-owned businesses. Many are offering PPP loans, as well as assistance with the application.
You cannot use this tool to help you find funding through the Economic Injury Disaster Loan program (EIDL), which the SBA recently reopened to all small businesses. EIDL applications are only available directly on the SBA website.
How Lender Match works
The SBA’s Lender Match tool is a quick form that you or an employee can fill out to connect your business with a lender in your area.
You can start by filling out a form with your name, email address and phone number. The SBA then sends a PIN number to your email address, which you need to enter to continue filling out the form with more details about your business, such as its name, ZIP code, web address, industry and time in business.
You also need to provide information on how much money you want to borrow and how you plan on spending the funds. You’ll then indicate whether or not you have a written business plan, financial projections or collateral. If you’re currently generating revenue, you can also provide an estimate of your average annual revenue.
The last step is to select your business’s veteran status (or non-veteran if none of the owners served in the US Armed Forces) before reviewing and submitting the form to the SBA. You’ll receive a notification telling you how many lenders in your area you could potentially apply with.
And you’ll have the option to have the SBA send your information to these providers.
Access to other resources for underserved businesses
Even if you’re not interested in the PPP, the SBA Lender’s match tool could be a resource for small businesses that have had a hard time qualifying for a loan. Connecting with these lenders may help you find other programs that could be a good match for your small business.
Many can also provide resources that you might not find at your local bank. For example, the New York-based CDFI Business Center for New Americans has staff that are fluent in a variety of languages such as Hindi, Kannada and Spanish.
Grameen America, a CDFI that specializes in working with women-owned businesses in low-income areas, requires borrowers to take business training courses as part of its loan program. Many also offer funding to startups and typically don’t consider your credit score.
The SBA’s local assistance tool
If you’d rather not give up all of your personal information — or miss the June 30 deadline — you can use the SBA’s local assistance tool to find a local SBA-affiliated office near you, like a Small Business Development Center (SBDC).
These might not fund loans directly, but can point your business toward resources you might not have found on your own. They also usually offer assistance with applying for loan programs, including the PPP and the EIDL.
Some may also help you learn what steps your business can take to open it up to more funding opportunities.
For example, these can often provide information on how to get your business certified as a Minority Business Enterprise (MBE), Women’s Business Enterprise (WBE) or Veteran Business Enterprise (VBE).