Round two of the Paycheck Protection Program (PPP) has begun with an additional $310 billion designated to help small businesses keep employees on the payroll. To help level the playing field, $60 billion has been set aside for minority- and women-owned businesses through community banks, credit unions and alternative lending companies.
This time around, the Small Business Administration (SBA) has tried to close the loopholes that allowed wealthy organizations to rake in the money during round one.
Aside from acting fast, what else can Black-owned businesses do to be funded?
The Defender interviewed Ingrid Robinson, president of the Houston Minority Supplier Development Council, and Carol Guess, president of the Greater Houston Black Chamber, who shared best practices and tips to improve the chances for PPP funding in round two.
Defender: What is the best way for Black small businesses to apply for PPP round two?
Robinson: The best way to get a PPP loan is wherever you have a relationship. If you have a strong relationship with your bank and they are willing to work quickly on your behalf, that is the best route. If you are not that fortunate, HMSDC can help. As part of our advocacy efforts for minority businesses, we have a strong relationship with regional banks and Community Development Financial Institutions (CDFIs), which are non-profit banks.
For example, I received a call from a CDFI asking if we had MBEs that could not get processed through their banks and, if so, to send them their way. I would advise minority-owned businesses to pick up the phone and give us a call [713-271-7805]. We have all sorts of resources including private grants posted in the COVID-19 resource section of our website at www.hmsdc.org.
Guess: It is best for businesses to apply for the second round as soon as possible and to utilize services like Operation Hope (www.operationhope.org), a non-profit organization that will help business owners correctly fill out the EIDL loan application at no cost.
Defender: Are there any application “tips” you can share?
Robinson: If you were in business in 2019, the program is designed to look at your average payroll over the course of that year. Many payroll entities like ADP have created a report that you can download and it pulls all the information you need into one single report, making it easy to calculate the amount you are entitled to apply for. Remember, while you can use PPP funds to pay rent, utilities, telephone and internet charges, you can only be awarded based on payroll and benefits.
Most importantly, you want to maintain the same number of employees for which you applied over the next eight weeks after funding so the loan will be forgiven. This is not an automatic forgiveness; however, you must maintain those employees to request and be granted forgiveness of the loan. HMSDC has a PPP worksheet on our COVID-19 Resource page that can be used to figure out the calculation.
Guess: The following are some do’s and don’ts to avoid PPP loan rejection: (1) Do not submit more than one application. (2) Do have complete financials, including correct bank account numbers. (3) Do make sure child support payments are up to date. (4) Do what you can to close out any bankruptcies.
Defender: Are third-party lenders and organizations like Sean “Diddy” Combs’ “Our Fair Share” platform helpful?
Robinson: I believe any resource that helps minority-owned businesses understand how to apply for a PPP loan is a good thing. There are local banks like Unity who are a part of the National Bankers Association and have prioritized financing minority business owners for decades. The criteria for applying for the PPP loan is the same no matter where you go. The advantage is finding an institution that will ensure your paperwork is completed correctly, can expedite SBA review, and prioritize the processing of your loan quickly before funds are depleted again.
Guess: Small businesses should use any reputable help they can get. I would suggest checking the comments posted regarding any organization working with business owners to complete applications, and also try tested businesses resources such as the Small Business Development Center (www.sbdc.uh.edu). These organizations have webinars available to help business owners with both EIDL and PPP applications on its website. Our chamber will also host a webinar for members regarding the EIDL loan application.
Regarding banks, we are told that several are only working with their current customers. Following is a list of banks that will work with companies without a current banking relationship and have worked favorably with minority business owners related to the PPP loan:
- Unity National Bank
- Wallis Bank
- Mint National Bank
- First Financial Bank
- Third Coast Bank
- Woodforest National Bank
- Texas Gulf Bank
- First Texas Bank
- Tech companies accepting applications: Kabbage, Bluevine, Crossriver, OnDeck, Veem, PayPal, Nav, Lendio and Divvy