Working Together to Save the American Dream
As small business owners across the country continue to grapple with pivots, changes, and restrictions, financial institutions across the country are working around the clock to get relief funds into those business owners’ hands.
The action from Congress to relaunch the Paycheck Protection Program was a welcome sight in late December. When the program finally reopened this month, many — including me — were hopeful that the rollout would go smoothly. The more guidance we received from the SBA, the more we understood this round of PPP would go slower, and that was an intentional move on their part.
One of the biggest criticisms of last year’s program was the unequal distribution of funds at the beginning. Truly small businesses seemed to be put on the back burner as banks prioritized large loans for business owners with whom they already had a relationship. This, plus numerous reports of fraud, have tainted what in reality was a remarkably quick rollout of a previously nonexistent program.
The Burden and Blessing of Change
This year, the SBA has taken what it learned and made a few strategic changes to ensure that business owners who need funds the most are put at the front of the queue. While this makes for a more complicated application and review process, with additional layers of scrutiny, these checks should go a long way toward ensuring the funds last longer than in the first round. And hopefully, this means that the program does what it’s intended to do: give struggling businesses access to relief funds.
While these changes are both strategic and necessary, they do place an additional burden on financial institutions, like Lendio, as well as applicants. As a connector between small business owners and lenders, Lendio’s primary goal is to speed up the process of facilitating PPP loans. Fortunately, it has been an all-hands-on-deck team effort this go-around.
Building an ecosystem that can pull off the incredible demand for funds takes an enormous amount of collaboration. I’ve witnessed this spirit of collaboration from the SBA, standing up its new portal for lenders to submit applications. I’ve seen a spirit of collaboration from our lenders and partners, working together to integrate APIs, share resources, and transfer knowledge. And I’ve felt this spirit of collaboration from our small business owner applicants, who have diligently provided the necessary documentation, even as the guidelines change and more is required of them.
All in on Small Business Recovery
Earlier this week, the former Deputy Associate Administrator of the SBA and head of PPP, Bill Briggs, shared his perspective on PPP. He noted that in just a matter of weeks, SBA’s lending authority grew from $45 billion, a small number in federal terms, to over a trillion dollars — twice the Pentagon’s operating budget with a fraction of the employees.
Briggs summed up working on PPP like this, “People should be very proud of this public-private partnership and how hard the SBA, the treasury and other agencies have worked over the last year.”
While I know most people will never see, understand, or probably care about what has gone on behind the scenes to pull off the PPP, to me, the combined efforts show an incredible passion for and investment in small business — one that I hope continues after the pandemic ends. This kind of collaboration will be key as our country strives for economic recovery and growth, long after COVID-19 restrictions are lifted.
At Lendio, we are building a machine we expect will process thousands of PPP applications a day. While it has taken longer than we anticipated, our recent progress indicates we will be firing on all cylinders very shortly. Taking the time to get this technology right will ensure that more business owners receive the relief funds they need. It will also empower them, when the time comes, to get those loans forgiven — a vital part of this program.
While we can’t revitalize the small business economy overnight, the entire team at Lendio, along with our referral and lender partners, are determined to help where we can. We will continue to pour everything we have into saving the American dream for as many business owners as possible.
