Funds for more PPP loans evaporate
If your independent dealership didn’t already secure a Paycheck Protection Program loan, it’s unlikely you’ll be seeing those federal funds.
While the program was originally extended through the end of May, the Small Business Administration announced the exhaustion of PPP program funding on Tuesday. The only entities that now can process these loans are Minority Deposit Institutions (MDIs) and Community Development Financial Institutions (CDFIs).
“The SBA’s Paycheck Protection Program has been a vital financial lifeline for our nation’s small businesses amid the coronavirus pandemic,” said Dan Berger, president and chief executive officer of the National Association of Federally-Insured Credit Unions (NAFCU).
“Credit unions have been proud to assist our nation’s smallest, hardest hit businesses to receive the funding they needed to overcome financial hardship,” Berger continued in a statement.
According to a news release from the Consumer Bankers Association, the most recent data from the American Action Forum indicated that 11 of the top 15 lenders through PPP were CBA members.
CBA said that data indicated these 11 members together accounted for more than 1.9 million loans — 19% of the total funded — worth more than $176 billion, or 23% of the federal monies made available.
“Over the past year, banks across the country have moved heaven and earth to support the American people,” CBA president and CEO Richard Hunt said in the news release. “In coordination with the SBA, banks worked around the clock to stand up an entirely new government program designed to provide relief to small businesses amidst unprecedented economic headwinds.
“In just one year, lenders issued 166 years’ worth of SBA loans, with the nation’s leading banks distributing more than half of the total dollars lent through the program. This herculean effort saved millions of jobs and supported struggling communities when they needed help most,” Hunt continued.
With SBA saying PPP funds are depleted, Hunt touched on what should happen next — a recommendation that could help independent dealerships.
“Now it’s time to focus on the PPP forgiveness process,” Hunt said. “Last year, CBA led a coalition of more than 150 associations to streamline the overly complicated and burdensome application process for PPP loan forgiveness.
“This coordinated effort led Congress to pass legislation simplifying the forgiveness process for loans less than $150,000, amounting in the equivalent of $7 billion of additional small business relief,” he continued.
“Even as our economic recovery picks up steam, banks will continue working to get Americans back on their feet until this pandemic is behind us,” Hunt went on to say.
And local political leaders seem to be on board, too.
In April, a bipartisan delegation from the U.S. Conference of Mayors (USCM) held a virtual meeting with SBA administrator Isabella Guzman.
Prior to the meeting, the USCM signed a Strategic Alliance Memorandum which outlined the conference’s shared priorities with the SBA and reaffirmed the groups’ shared commitment to supporting small businesses in cities across the country.
The mayors thanked Guzman for her dedication to working with local leaders and helping jumpstart America’s economic growth, both throughout the ongoing COVID-related economic downturn and beyond.
“It was a privilege to meet with a bipartisan delegation of mayors to discuss what our nation’s entrepreneurs need to recover and rebuild from this pandemic,” Guzman said in a news release from SBA.
“I look forward to joining forces with the U.S. Conference of Mayors in the months ahead as we work to bring back the small businesses and innovative startups that define the character of our nation’s cities, create jobs and build an equitable economy that works for everyone,” she went on to say.