For the smallest buy-here, pay-here, and independent dealerships, perhaps their best opportunity to secure funding through the latest round of the Paycheck Protection Program (PPP) arrives on Wednesday.
According to an announcement from the White House on Monday morning, the Biden administration has instituted a 14-day period, starting Wednesday, during which only businesses with fewer than 20 employees can apply for relief through the program.
The White House announcement indicated a pair of year-over-year gains made by the program, including:
— The share of funding going to small businesses with fewer than 10 employees is up nearly 60%
— The share of funding going to small businesses in rural areas is up nearly 30%
In explaining the decision, the White House announcement said, “They are Main Street businesses that anchor our neighborhoods and help families build wealth. And while the Biden-Harris administration has directed significantly more relief to these smallest businesses in this round of PPP than in the prior round, these businesses often struggle more than larger businesses to collect the necessary paperwork and secure relief from a lender.
“The 14-day exclusive application period will allow lenders to focus on serving these smallest businesses,” the announcement continued. “The Biden-Harris administration will also make a sustained effort to work with lenders and small business owners to ensure small businesses take maximum advantage of this two-week window.”
During the week of Feb. 8, the U.S. Small Business Administration (SBA) said it hit a major milestone of approving $104 billion of PPP funds to more than 1.3 million small businesses during the latest round of loan bookings.
Other highlights from this round include:
— Reaching more of the smallest businesses with 82% of all loans going to businesses requesting less than $100,000
— Reaching rural communities in a meaningful way with 28% of businesses that have received funding this round are in rural communities
— Increasing partnerships with Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) who are trusted agents in extending economic relief to minority communities and underserved populations
The SBA said it is also following through on its commitment to take additional steps toward improving the speed to resolve data mismatches and eligibility concerns so that small businesses have as much time as possible to access much-needed PPP funds while maintaining the integrity of the program.
SBA officials explained three important changes will:
— Enable lenders to directly certify the eligibility of borrowers for the first draw and second draw PPP loan applications with validation errors to ensure businesses who need funds and are eligible receive them as quickly as possible
— Allow lenders to upload supporting documentation of borrowers with validation errors during the forgiveness process
— Create additional communication channels with lenders to assure we are constantly improving equity, speed, and integrity of the program, including an immediate national lender call to brief them on the platform’s added capabilities
“We are pleased that the Paycheck Protection Program is targeting the smallest of small businesses and providing economic relief at a crucial time in American history,” SBA senior advisor to the SBA administrator Michael Roth said in a news release posted on Feb. 11.
“The SBA has achieved another major milestone to provide critical recovery capital to America’s small businesses by approving 1.3 million PPP loans totaling $104 billion in the current round,” Roth continued. “While we are excited that we are doing a better job of reaching the hardest-hit industries and communities, we are committed to taking additional steps to ensure that there is equitable access for underserved businesses and that we are leading with empathy to support small businesses in a difficult spot.”