San Antonio small business requests next wave of P3 loans

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Monday was the first day small business owners could apply for loans through the new Paycheck Protection Program (P3) – a forgivable loan program that provided relief to businesses at the onset of the pandemic.

By the end of Tuesday morning, more than 700 small business owners had contacted LiftFund, a non-profit organization helping administer the program in San Antonio, hoping to start the process of a PPP loan.

These were family restaurants, marketing companies and trucking companies – the “small, small businesses,” said Janie Barrera, group president and CEO. The association provides loan services to those clients who otherwise do not have a commercial bank account.

Last year, the organization processed $ 25 million in PPP loans to approximately 1,000 small businesses. The typical business had five employees and received a loan of approximately $ 25,000.

For these small business owners, the loans should provide much needed support.

“They breathe a sigh of relief that there is a lifeline to keep them afloat, at least over the next two months, said Richard Perez, president of the San Antonio Chamber of Commerce.

Among them is Martin Garcia, the owner of a gift and home decor store on San Pedro Avenue called the Gramercy Gift Gallery.

Last year, he applied for and received a PPP loan through his community bank, TexStar. The amount was not substantial – less than $ 10,000 – but it helped move his business forward through the difficult months of the pandemic, he said.

He first applied after one of his employees sent him information about it. He struggled with the complicated paperwork – a point that was criticized in the first round.

“This is all very new to me,” said Garcia, who spends six days a week in the store. “I don’t have a lot of experience in obtaining funding or grants, but I will be spending time doing research. “

Garcia’s business model did not fit easily into the paycheck protection program, which bases the amount of the eligible loan on the size of the company’s payroll. Besides him, there are two other paid staff, and he said his business – just over a year old when the pandemic hit – is not mature enough for him to perceive him. – even a paycheck. He also works closely with seven artisans who sell products in his store, but they are not his employees.

But Garcia said the paperwork for applying for the loan in the last cycle was much simpler than the first time around.

Gramercy Gift Gallery owner Martin Garcia stands outside his store. Credit: Bonnie Arbittier / San Antonio Report

The federal government’s roll-out of the first round of PPP loans last April was criticized for being inaccessible to many small business owners, who often have to balance accounting work with their other duties as chefs, drivers, and washes. -dishes. Without dedicated accountants, they rushed to prepare the complex documents involved in the loans.

Meanwhile, large companies with teams of accountants and payroll contractors have carved out the lion’s share of the first round of loans, including the funding ran out in a matter of weeks.

The current cycle is supported by more than $ 284 billion in funding, as part of the COVID-19 relief plan signed in late 2020. The new injection brings the total funding for the program to $ 806 billion.

This time around, the US Small Business Administration is taking a more deliberate and focused approach.

“These updated guidelines improve targeted PPP relief for small businesses most affected by COVID-19,” Treasury Secretary Steven Mnuchin said in a press release. “We are committed to quickly implementing this cycle of PPP to continue supporting American small businesses and their workers. “

Community development financial institutions, which serve low-income, minority-owned and other disadvantaged businesses, received the first disbursements of the funds on Monday, with major banks being shut down until Wednesday.

These types of lenders, including LiftFund, made up 10% of all PPP lenders in 2020, according to the SBA press release.

In addition to the focus on small businesses, some funding is specifically targeted to community financial institutions, and the new size requirements for borrowers will also block larger, richer businesses that received assistance the year. last.

The loans come as the U.S. economy has cut 140,000 jobs in recent months and the coronavirus pandemic has reached its worst point yet.

Nationally, more than one in three small business owners said they would not survive the next three months without additional financial support, and the same is true for more than two black business owners and in five Latinos, according to a survey of Small Business Majority Small Business Owners, an advocacy group.

“This is a great second step,” said Perez, the chairman of the chamber. But given the hardships for small businesses, Congress should always consider more stimulus money – and perhaps even a major federal infrastructure bill to boost jobs, he added.

“It’s still going to be a long time before our economy is where it needs to be,” he said.

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