Businesses Encouraged to Apply for Paycheck Protection Program Loans | Local News

Lessons from the federal paycheck protection program in 2020 led financial institutions in New Mexico to try to get more of these forgivable loans to low-income, underserved business owners and streamline the process. of request.

The PPP, billed as pandemic relief for small businesses, came under fire in the spring after large companies received the loans.

The third round of companies seeking $ 284 billion in loans entered its fifth day on Friday.

The Small Business Administration opened this cycle on Monday, allowing only first-time PPP applicants to apply on Monday and Tuesday. Second-time applicants could apply from Wednesday. Only community development financial institutions, minority depositories, certified development companies and microcredit intermediaries could accept applications by Friday.

“One of the things we’re grateful for about this early access is that it’s less demanding on the IT infrastructure. [to get applications processed online]”said Marisa Barrera, executive vice president of DreamSpring, which provides loans to small businesses in underserved areas of the state that are unable to obtain bank loans.” There have been a lot of bugs. [in 2020]. “

The first $ 369 billion in P3 funding began on April 3, and the program ran out of money on April 16, well ahead of the June 30 deadline. Another $ 310 billion in aid began on April 27, but money was left in July.

“What we don’t know is how fast the money will be talked about this time around,” Barrera said.

The P3 is a federal incentive for small businesses, typically with fewer than 500 workers, to keep their employees on the payroll even if the businesses are closed or have significantly reduced sales. Loans are repayable and essentially become grants if employee retention criteria are met and funds are used for eligible expenses.

PPP loans can finance salary costs, rent, mortgage interest, utilities, and some operating and procurement costs, according to SBA guidelines.

DreamSpring accepts PPP applications from any small business, but Barrera said the organization wants 60% or more of its applicants to come from minority and underserved businesses.

DreamSpring had accepted 430 New Mexico small business PPP requests on Thursday asking for more than $ 17 million. Barrera acknowledged that many minority and non-English speaking business owners were left behind in 2020.

“One of the things we learned is the importance of community outreach and marketing for the underserved community,” Barrera said. “We truly believe that it is essential for the underserved entrepreneur to be familiar with and be encouraged to apply [for a PPP loan]. “

For this round, DreamSpring assists candidates in English and Spanish.

In April, Santa Fe-based Century Bank accepted applications from 552 New Mexico companies for $ 102 million.

“Our goal is to process as many requests as possible,” said Century Bank Regional President Gary Lutz.

The lesson Century Bank learned in 2020 was that the paper application process was too cumbersome.

“We contracted with a technology company that performs automated online processing of requests,” said Lutz. “The first time, we made requests on paper, manually entering data. We want to process requests sooner, so [a] businesses can get financing sooner.

The standard loan amount a business can apply for is 2.5 times the average monthly salary costs for 2019 and 2020, up to $ 2 million. However, hotels and restaurants looking for a second PPP loan can request 3.5 times more than their 2019 or 2020 average monthly salary costs, up to $ 2 million.

Lutz stressed that small businesses shouldn’t rely entirely on the paycheck protection program.

“Everyone should consider local and state grants to help protect them in the meantime,” Lutz said.

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