13,898 small businesses get PPP loans – About Your Online Magazine

Small businesses in Arkansas have borrowed $ 720.4 million in the current round of financing from the Paycheck Protection Program, as the initiative enters its final weeks for its March 31 closing.

Beginning in January, the U.S. Small Business Administration renewed the coronavirus relief program to focus on companies not reached in the initial payment protection program funding round in 2020.

As of mid-February, 13,898 small businesses in Arkansas had received loans. The average value is $ 51,834, according to the SBA’s Arkansas office.

“The SBA is reaching more eligible borrowers in this round. However, our work is not done,” said Edward Haddock, director of operations for SBA in Arkansas. “We have until the March 31 program deadline to continue to educate and help direct borrowers to lenders who can process their loan applications.”

Across the country, 1.7 million loans valued at $ 125.74 billion have been approved since January. All program loans are 100% forgivable and do not need to be repaid if companies use the money to pay staff and essential expenses, including protective equipment.

On Monday, President Joe Biden’s administration announced that it would update the program starting on Wednesday in an effort to “further promote equitable relief for American small businesses.”

Major changes include establishing a 14-day Salary Protection Program exclusive loan application period for companies and nonprofits with fewer than 20 employees. This period starts on Wednesday.

The changes also generate $ 1 billion to target individual owners, independent contractors and self-employed individuals. The effort is part of a plan to reach more companies owned by women and minorities.

“These actions will help to lay the foundation for a robust and equitable recovery for small businesses across the country,” the press release said.

The program allows for a second loan for companies that received financing last year, but only after they have spent their initial loan and if they have fewer than 300 employees and can demonstrate that they experienced a 25% reduction in gross revenues during any quarter of 2020 in compared to the same quarter of 2019.

Armor Bank, a community lender based in Forrest City, has made 30 new loans for programs since January – all for small businesses that also borrowed money when the program was launched last year.

The 30 loans average about $ 150,000 per borrower, said the bank’s CEO, Chad May.

The program helped the bank, which has about $ 265 million in assets, to expand its customer base. Last year, Armor made about 160 loans for programs and 35% went to new customers.

“We are seeing businesses that have been most affected by an ambitious return on financing,” said May. “The people who got financing in the first round last year used the money as an important part of their stabilization plan. They were ready to return to this round because they knew the importance of the program and how it could help them. “

The SBA Paycheck Protection Program process was criticized last year for lending to larger companies and because its system was shut down due to heavy loan requests sent in short periods of time. The relaunched program worked much more easily, said May.

“In the first round, there was a great sense of urgency in the need for funds – it was very frantic,” he said. “Companies were nervous in the first round of financing because there was a lot of uncertainty around the economy.

“Now companies are not so nervous, but they are still being affected financially and want to take advantage of available funds and keep people employed.”

In the current round of financing, which has $ 284 billion available, the volume of loans in Arkansas is below expectations, said Haddock. “We are slightly below our volume of loans per capita; as we make up about 1% of the population, we should see about 1% of total loans approved, or about 16,700 loans, ”he said, referring to 13,898 loans granted since the relaunch.

“Part of the approval delay can be attributed to security improvements required by (the statutes) to help reduce fraud and verify identity before issuing loan approvals. However, teams across the country are working diligently to resolve these delays. “

Combined with last year’s Paycheck Protection Program loans, 64,677 small businesses in Arkansans received just over $ 4 billion in loans.

In the US, more than 6.8 million loans have been approved since the program launched last April, for a total amount of $ 126 billion.

Paula Fonseca