SBA Loan Program Changes, But Not Soon Enough For Milwaukee-Based African American Group
The U.S. Small Business Administration (SBA) says it still has $130 billion to loan to small firms and nonprofits financially hurt by the COVID-19 pandemic. The application deadline is June 30.
But at least one Milwaukee-area business group says recent changes to the federal program aren't enough, and the organization has turned to local donors and the state.
Overall, the SBA says more than $500 billion has been loaned nationwide. That’s combining an earlier round of the Paycheck Protection Program (PPP) and the current round that ends June 30. Wisconsin's share so far is nearly $10 billion, sent to more than 80,000 companies and nonprofits.
Congress and President Donald Trump have just approved more flexibility for the program. Regional SBA Administrator Rob Scott says one change is to give the recipients 24 weeks to use the funds instead of just eight weeks, in order to possibly qualify for a loan forgiveness component. Scott hopes that change encourages more applications.
"Obviously, a lot of people were afraid that they weren't going to be able to spend the money and be in compliance to have the loan actually forgiven during that eight-week period because June 30 of this month was going to be the cliff that everyone basically had to spend all the money. Obviously now, with this 24-week period, they have until Dec. 31, 2020," Scott said Monday during a call with news reporters.
Federal officials also lowered the percentage of the loan that has to go to payroll to 60%, from 75%. Some firms argued the higher figure was encouraging laid-off employees to refuse to go back to work. So now, there's more money for businesses to spend on other things like rent and utilities.
The SBA says information is not available on the racial breakdown of the loan recipients or the geographic spread within a state.
Ossie Kendrix is president and CEO of the African American Chamber of Commerce of Wisconsin. He's skeptical of that claim.
Kendrix says many minority-owned businesses haven't able to access the PPP, either because of being sole proprietorships or not having an established relationship with the lending institutions that are part of the federal program. So, Kendrix says his Milwaukee-based organization turned to Wisconsin and the Evers administration.
"And the Ethnic Minority Emergency Grant was one of those ways the state stepped up to begin deploying emergency assistance grants,” Kendrix told WUWM.
State officials said last week that those federally-funded grants would be handed out soon.
Kendrix says the African American Chamber also turned to the Greater Milwaukee Foundation and other donors to create a local grant program for black-owned businesses.
"They successfully stepped up to the plate and donated the entire request at $100,000,” Kendrix said.
Kendrix says there's now $130,000 in the account and a new goal of $200,000. He says firms can start applying for the money Tuesday.
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