The Paycheck Protection Program (PPP), one of the signature relief programs of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, was intended to help keep small businesses afloat during the pandemic. We talked with four NYC businesses that received PPP loans, through the initial $349 billion round of funding and the second $310 billion round. Here are their stories.
Professional Services Firm
A professional services firm based in Manhattan applied for PPP in early April. Knowing what PPP meant to the firm, several team members researched the PPP and prepared an application in advance of the program opening. The team was able to pull all the required documents from their sophisticated payroll and accounting services. After applying through their bank, the firm received notification only that their application was received. Concerned about the generic, noncommittal response, the firm leveraged a board members’ long-standing professional relationship with a bank executive. A call was made to ensure that the firm’s application was expedited. The firm was approved and received their funds on April 16th.
Engineering and Architecture Firm
An engineering and architecture firm based in just outside New York City applied for PPP the first day it was offered by their bank, on April 3rd. They had extensive experience bidding on city contracts and were able to gather and submit a completed application as soon as the PPP application went live. After applying, they didn’t hear anything other than that their application had been received. At the end of April, and with no word from their bank, they considered cutting staff salaries in half due to cash flow issues. Fortunately,, on May 1st, the firm heard from their bank that their PPP loan was approved. They still have not received the funding.
A food distributor based in Brooklyn heard about the PPP program in early April but did not apply for the loan until after the second round of funding was passed by Congress on April 24th. On April 27th, they were contacted by a CDFI that they had previously received funding from and learned that the CDFI was also participating in the second round of PPP lending. With the CDFI’s ability to gather and retrieve their documents quickly, they applied for PPP funding on a Friday and were approved on the following Monday.
Community Art Space and Childcare Provider
A community art space and childcare center based in Queens closed in late March. The owner, who had previously had worked with a New York City Business Solutions Center to secure funding, reached out to learn about what financial relief programs were available. The owner made the difficult decision to lay off her staff so that they could apply for unemployment benefits as soon as possible, particularly given the Federal increase to unemployment benefits. Since the owner had previously applied for capital, she had the required documentation organized and digitized. In early April, she applied for the EIDL loan through SBA.gov, and the PPP through a community bank with which she had a previously existing relationship. She received approval for PPP and received her funds on May 4th.
We’ve spoken with numerous small business owners about their PPP experience. The common theme is that each of these business owners had relationships, help from their network, paperwork in order, and a little bit of luck to get their applications approved. Not every small business has those luxuries. In particular, many business owners of color and those from underserved markets have been left out of the funding.
More than 7.5 million businesses are expected to close as a result of COVID-19 if they aren’t able to access funding and support. Next Street is working to reduce that number through our Recovery and Resiliency offerings. Tell us about your PPP experience. We’d love to hear from you.