If your business missed the PPP program, here’s where you can apply for money
The paycheck protection program was seen as an unlimited treasure chest when it was launched a year ago to help small businesses weather the economic disaster caused by the COVID-19 pandemic.
But struggling companies have finally bottomed out.
Last week, the Small Business Administration, which manages the program, said loans to traditional banks ran out before the expected May 31 deadline.
“We didn’t expect to spend that money in this amount of time,” said Herbert Austin, district manager for the Dallas-Fort Worth SBA office.
Texas lenders ranked third in the country in PPP loans granted, with 460,000 loans totaling $ 20.5 billion. The state lagged behind California and New York.
Small businesses that have missed out have other options.
First, there is still around $ 9 billion in the PPP vault that the SBA has set aside for minority depositories and community development financial institutions to lend to businesses.
“The program isn’t completely over,” Austin said. “It’s still open to some extent.”
Also Economic disaster loan The program, intended to help businesses affected by the pandemic, is continuing, its deadline being postponed to December 31. These loans are less popular because they are non-repayable like PPP loans are.
In March, the loan limit for the EIDL program was increased to $ 500,000, from the $ 150,000 that many companies had found limiting. The app takes about 20 minutes to complete, Austin said. Applicants who have received only $ 150,000 can request an increase under the new limit.
“Ideally, you would apply for PPP to cover payroll, then apply to the EIDL program to cover the costs of running the business,” Austin said.
The SBA also designed disaster loan programs specifically for restaurants and closed places, which were particularly affected in a year in which people were encouraged to stay at home, Chris said. Jones, executive vice president of Texas Security Bank. The 13-year-old Bank of Dallas, which has around $ 900 million in assets, made just under a thousand PPP loans totaling $ 250 million in the first round and about 525 loans totaling $ 125 million in the second round. .
The owners of rooms and associated companies can request the Subsidy to operators of closed sites, which has more than $ 16 billion, of which $ 2 billion is reserved for companies with 50 or fewer employees. If approved, a business may be eligible for a grant equal to 45% of its gross income earned, up to a maximum of $ 10 million.
For restaurateurs, the SBA has opened its $ 28.6 billion Restaurant Revitalization Fund May 3. It approves grants of up to $ 10 million. The SBA said the program had already seen “extremely high demand.”
During the first two days of the program, 186,200 eligible restaurants, bars, food trucks and other businesses applied for the grant. During the first three weeks, businesses owned by women, veterans, and socially and economically disadvantaged people have priority.
Jones said he was encouraged to watch Texas Security Bank’s PPP clients survive the pandemic.
“There will be bumps and bruises throughout this, but for the most part, I’m seeing general improvements in our clients’ businesses,” Jones said. “I’m not saying that we are completely out of the woods, but we are seeing improvements at every level.”
Banks have been able to significantly increase their relationships with new customers through the PPP program. Frost Bank said it had a 47% increase in new relationships in Dallas in 2020. Some of the banks that participated in the program are taking off where the PPP program left off.
Dallas-based Bank Comerica, which operates primarily in Texas, Michigan, Arizona, California and Florida, recently announced a $ 5 billion commitment to small business loans over the next three years.
“Now that P3s are depleted, it’s more important that we commit to supporting small business lending,” said Cassandra McKinney, executive vice president of retail banking at Comerica.
Comerica signed around 20,000 loans totaling nearly $ 4 billion in the first round of PPP, but has yet to count final numbers for the second round.
Disaster loan programs such as PPP and EIDL have been in the spotlight over the past year. But Austin said entrepreneurs shouldn’t forget about the traditional business loans that made up the bulk of SBA loans before the pandemic. Even in the midst of the chaos, new small businesses are opening every day, he said.
“The American dream of owning a business is still alive,” said Austin.