PHILADELPHIA (KYW Newsradio) — Business owners have already started applying for the latest round of the Small Business Administration’s Paycheck Protection Program loans. This time, the federal government made changes to ensure those in underserved communities get a head start.
Applications reopened on Monday, with new rules designed to give minority-owned businesses a fair chance to get relief.
“Right now, large banks are not able to process any PPP loans at all,” said Ian Lawrence, senior director at the Enterprise Center, a Philadelphia nonprofit that supports minority entrepreneurs.
Last December, the organization partnered with the African American, Asian American and Hispanic chambers of commerce in the region to prepare Black and brown businesses for the latest round of PPP funding.
Last summer, minority-owned mom and pop shops were pushed to the back of the line by businesses seeking larger loans. Big banks processed applications from their larger small-business clients first, which took up the first round of funding in a matter of days.
According to an Associated Press analysis, this forced minority-owned businesses to wait months for funding while well-financed companies like Ruth’s Chris Steakhouse and the Los Angeles Lakers got millions.
So for this round, community development financial institutions, or CDFIs, like the Enterprise Center got a head start.
The SBA also earmarked $15 billion to $25 billion in funds for businesses from underserved communities.
“CDFIs and MBEs are closer to minority-owned businesses,” explained Lawrence, “so the thought is if you give them a head start, those businesses will get a start on PPP.”
The Enterprise Center and the diverse chambers of commerce launched “Get Your Paperwork Ready,” a program designed to educate small businesses on what they need to successfully apply for a PPP loan.
“So many minority-owned small business owners are working in the business,” said Lawrence. “Many do not have their paperwork ready, so we wanted to help them get focused so that they could apply day one.”
The Enterprise Center received at least 100 PPP loan applications on Monday and expect more to come in all week.
Lawrence said businesses seeking a second round of funding can begin to apply Wednesday.
Other changes to PPP loans include a more streamlined process for loan forgiveness, increased opportunities for funding for restaurants and lodging businesses and more tax benefits.
The Enterprise Center will be hosting workshops to help small businesses apply via CDFIs later this week.