Media Contact: Shelia Byrd
Hope Policy Institute
shelia.byrd@hope-ec.org
601-832-7627
Bipartisan Effort Makes Small Business Administration Paycheck Protection Program More Accessible
Continued Improvements Will Position Program to Better Serve Vulnerable Communities
JACKSON, MS – Yesterday, the Small Business Administration announced a set-aside for Community Development Financial Institutions (CDFIs) to help ensure relief reaches underserved small businesses. As part of its CARES Act COVID-19 relief package, Congress authorized over $600 billion in small business relief through the Paycheck Protection Program (PPP) to be deployed through participating SBA lenders. More than half of the $511 billion of PPP funds have been deployed by banks with more than $10 billion in assets making an average loan size of $129,100. In contrast, HOPE has deployed more than 1,300 PPP loans across the South, totaling more than $66 million, with a median loan size of $11,100.
“We applaud this bipartisan action by the Treasury Department and Congress to recognize the importance of CDFIs in reaching the nation’s most vulnerable communities through the Paycheck Protection Program,” said Bill Bynum, CEO, HOPE (Hope Enterprise Corporation / Hope Credit Union). “CDFIs and Minority Depository Institutions have a proven record of financing businesses not well served by mainstream financial institutions, particularly in communities of color. Rebuilding the nation’s economy requires even bolder bipartisan leadership to ensure the success of smaller businesses, and their essential workers, who are most vulnerable to the pandemic’s devastating impact.”
HOPE also called on lawmakers to make additional improvements to the SBA PPP necessary to make the program more accessible to vulnerable small businesses:
- Streamlined loan forgiveness on loans less than $100,000 – current guidelines are too onerous for very small businesses, preventing many from applying to the program. By streamlining loan forgiveness procedures for vulnerable small businesses, more will take advantage of the program and participating owners will have more resources to invest back into the business.
- A minimum fee of $2,500 – a minimum fee is critical to ensure CDFIs and other lenders can make loans to smaller businesses, who are hardest hit and most financially fragile.
- 24 weeks to deploy PPP funds – The timeline, impact and effects of the pandemic have varied across the nation. Businesses need more time and flexibility to expend PPP loan proceeds.