By Chelsea Langston Bombino
On Friday, June 19th, the Small Business Administration (SBA) introduced a resource specifically created for small businesses and nonprofits to help them find lenders in the Payroll Protection Program (PPP). The SBA’s Lender Match tool was developed to address the ongoing needs of small businesses and nonprofits, which may have experienced barriers finding a lending institution. SBA Administrator Jovita Carranza stated: “The SBA is focused on assisting eligible borrowers in underserved and disadvantaged communities and connecting them with forgivable PPP loans, especially before the June 30, 2020, application deadline.”
This tool is available online and serves as a pairing agent between nonprofits, including faith-based and community-based organizations, and financial lending institutions that may be better positioned to serve them, including: Certified Development Companies (CDCs), Minority Depository Institutions (MDIs), microlenders, and other entities. The new Lender Match tool is a significant step forward in addressing a challenge Sacred Sector staff have heard about, anecdotally through many faith-based leaders, especially those serving in rural and urban communities, and those led by and serving people of color.
One leader, prior to the existence of the Lender Match tool, shared with Sacred Sector: “It seems like if you don’t have to have a close, preexisting relationship with a bank, your organization will have challenges finding a lender. In the Black community, we don’t always have the funding relationships we need. For ministries like mine - small, Black community-based services - we just aren't literate in how to navigate all these different things. I am 77 years old. There is a digital divide, a financial divide.”
Emerging faith-based nonprofits and congregations are often underresourced and under-networked, and may lack preexisting connections to a lending institution. Especially during national crises like COVID-19, these religious community-serving institutions and houses of worship offer essential material, relational and spiritual supports in their communities. And yet, these same organizations are likely to face additional challenges in accessing these loans. A summary of the cumulative PPP data shows that as of June 22nd, there have been 4,675,868 approved loans for an average loan size of $110,187, with 5,456 participating lending institutions.
The Lender Match tool is designed to be straightforward and user friendly for organizations that may have not navigated this process before. The Lender Match resource walks nonprofits through the following steps:
“1. Describe your needs. Answer a few questions about your business in as little as five minutes.
2. Get matched in 2 days. Receive an email with contact information of lenders who express interest in your loan.
3. Talk to lenders. Compare rates, terms, fees, and more.
4. Apply for a loan. Submit loan applications and paperwork.
You're well on your way to securing a business loan!”
The Lender Match tool does not accept Economic Injury Disaster Loan applications.
This tool provides additional clarity and support for small businesses and nonprofits impacted by COVID-19 to successfully partner with lenders who have not already applied for or received a PPP loan. Carranza elaborated: “As communities begin to carefully reopen across the country, there are still many more opportunities to provide this assistance to businesses who have yet to access these forgivable loans. SBA is utilizing these partnerships with CDFIs, MDIs, CDCs, Farm Credit System lenders, microlenders and many other participating small-asset lenders to ensure that access to this emergency funding reaches the most small businesses and their employees in need – a key priority for President Trump.”
According to the SBA, the Lender Match tool is now being reinstated after a time of pause caused by “CARES Act implementation priorities and loan volume.” Although the main focus of the Lender Match tool in this moment is on PPP, it is also worth noting that Lender Match connects small businesses and nonprofits with other SBA financial lending options “such as 7(a), 504, Microloans, and Community Advantage loans which are currently offering debt relief.” Until the PPP ends on June 30, 2020, borrowers who utilize the Lender Match tool will have their information shared with Small Asset Lenders and CDFIs with less than $10 billion in assets.
The SBA also provides an online one-pager with basic information about the loan terms and process for nonprofits and small businesses interested in applying for the SBA’s PPP loan program. For example, the loan will be forgiven if the amount is used toward basic operational expenses such as payroll (at least 60 percent), rent, utilities, and mortgage interest. Loan forgiveness is contingent upon small business or nonprofit employers sustaining the same number of employees and at the same wage amounts. However, as noted on this one-pager, the loan application and instructions outline “several measures to reduce compliance burdens and simplify the process for borrowers.” These measures include how to calculate a nonprofit’s eligibility for loan forgiveness, as required by the CARES Act, and a new protection for employers who have made a good-faith effort to rehire employees, and otherwise would have faced a reduction in loan forgiveness. The page also notes that loans issued after June 5,2020 have a maturity of five years and a one percent interest rate.
There has been much media coverage and public discourse regarding the challenges and impact of COVID-19 on under-resourced individuals and families, especially in communities of color. However, what is not being made clear is the disproportionate impact on the community organizations, faith-based nonprofits and congregations that are often closest to these families. The implementation of a government program, like the PPP, can either advance or hinder the ability of these organizations to thrive. The Lender Match tool is one positive step forward in addressing the barriers many emerging faith-based and community-based nonprofits have experienced in applying for PPP loans.
Chelsea Langston Bombino is the director of Sacred Sector, an initiative of the Center for Public Justice. Sacred Sector is a learning community for faith-based organizations and emerging leaders within the faith-based nonprofit sector to integrate and fully embody their sacred missions in every area of organizational life. Chelsea is also a wife to Joshua and a mother to Samuel and Benjamin.
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