Showing posts with label EIDL. Show all posts
Showing posts with label EIDL. Show all posts

Thursday, May 14, 2020

Black People and COVID-19: Key Impacts.

Black People and COVID-19 | Key Impacts

A new national survey of African American small businesses was conducted by Washington, D.C.-based Creative Investment Research. The survey asked questions about the Paycheck Protection Program and the Economic Injury Disaster Loan Emergency Advance (EIDL) Programs. The survey was intended to get a true pulse of how effective the lending programs have been. Sixty four percent (64%) of survey participants that said they applied for the Paycheck Protection Program (PPP), only 19% got funding. Even those receiving funding, however, got far less than what they asked for or expected. As survey respondents were predominantly Black businesses, this gives us some insight as to why unemployment is high and growing among Black Americans.

What can Black people do immediately?
  • Apply for the stimulus check of $1,200 - 100% probability rate of receiving;
  • Apply for Paycheck Protection Program (PPP) - much lower probability rate of receiving PPP, only about 19% received funding per survey results. Services to help you apply:
    1. Lendio - committed to trying to get capital to black, women and minority companies
    2. Paypal
  • Apply for the Economic Injury Disaster Loan (EIDL)
  • Identify internal resources. Caucusing with your network to ask for money (loan pool). Look to your family for financial support and guidance.
Expected Impacts of COVID-19, ranked from most to least significant:
  • Health (95%). This is because: lack of top-level hospitals in communities of color, gentrification;
  • Employment (85%) - We estimate Black unemployment will hit 50% at peak. This is because Black people are the last hired, first fired. A lot of black Americans work in the service industry, which has been one of the hardest hit by the pandemic;
  • Education (70%) - The best opportunity to fix this issue is through more equitable and creative educational opportunities;
  • Homeownership (50%) - We suggest that the Fed engage with Fannie Mae and Freddie Mac to create mortgage-backed securities (MBS) to help Black homebuyers;
  • Small Businesses (40%) - Lower than expected impact since Black business owners are equipped with better survival skills.

Tuesday, April 21, 2020

Paycheck Protection Program Increase


Today's addendum to the CARES Act includes the following:

Section 101 provides amendments to the Paycheck Protection Program and to the Economic Injury Disaster Loans, and Emergency Grants.

The agreement increases the authorization level for the Paycheck Protection Program from $349 billion to $659 billion, and increases the authorization level for the Emergency Economic Injury Disaster (EIDL) Grants from $10 billion to $20 billion.

See our video on the EIDL Program: https://youtu.be/SzwQp11n-YQ (As we said in the video, you will want to document your EIDL and PPP applications. We still feel this program will have a hard time reaching women, Black, Hispanic and Asian small businesses. It has also been shown to provide more loans to red states than blue.)

The law also creates a set-aside for Insured Depository Institutions, Credit Unions, and Community Financial Institutions for the Paycheck Protection Program. It defines Community Financial Institutions as minority depository institutions, certified development companies, microloan intermediaries, and State or Federal Credit Unions. (Certified Development Companies (CDCs) are nonprofit corporations certified and regulated by the SBA, that work with participating lenders to provide financing to small businesses. There are 270 CDCs nationwide.) This section sets aside the following amounts for the Paycheck Protection Program to be made by the following institutions:

$30 billion for loans made by Insured Depository Institutions and Credit Unions that have assets between $10 billion and $50 billion; and

$30 billion for loans made by Community Financial Institutions, Small Insured Depository Institutions, and Credit Unions with assets less than $10 billion.

Small businesses should apply for both the EIDL and PPP Programs if they have not done so already. You should also immediately reach out to Insured Depository Institutions and Credit Unions that have assets between $10 billion and $50 billion. Of course, you will want to reach out to Community Financial Institutions, Small Insured Depository Institutions, and Credit Unions with assets less than $10 billion.

For a list of all banks, see: https://www.minorityfinance.com/guide/banks.xlsx

For a list of all credit unions, see: https://www.minorityfinance.com/guide/creditunions.pdf

For a list of all Community Development Financial Institutions in the US., see: https://www.minorityfinance.com/guide/cdfi.pdf

(Data from 2015).

We offer business consultation specifically focused on the needs of businesses during the COVID crisis. See: https://clarity.fm/williamcunningham