25% of chamber members get PPP loans approved
This week, HSC released a report from its most recent survey showing the impacts of COVID-19 on the local human services sector. We will use this report to expand awareness of the importance of human services to the community along with the challenges of providing these services with increased demand and/or lack of funding, technology and other resources.
One of the main concerns that came out of the survey was the difficulty that many nonprofits are having applying for and receiving approval for loans through the CARES Act, especially the Paycheck Protection Program. On a group call earlier this week hosted by Commissioner Driehaus, I had the honor of speaking with Senator Sherrod Brown about the financial challenges our sector is experiencing and the need for direct assistance from the federal government. Senator Brown was particularly interested in the issues around nonprofits applying for PPP loans and asked for specifics on the challenges nonprofits have been experiencing with their applications.
A quick survey this week showed that of the 29 agencies that responded, only a quarter had their loan applications approved. See a further breakdown of the reported loan statuses here. Other highlights:
- Some applications were rejected on the basis that, even though the organization applied early, the PPP funding was depleted before the bank submitted the application to the SBA.
- Some organizations were not able to apply for a loan because the bank did not return their calls or the bank had technical issues with their systems.
- Some banks required nonprofits to fill out a different application due to their nonprofit status, which ultimately delayed the process so that the funding ran out before the application could be submitted.
- Organizations expressed frustration that large for-profit businesses who have strong ties to their banks were able to get priority over small businesses and nonprofits. See NYT article on this issue here.
I have communicated these concerns to Senator Brown’s office and have asked for any assistance he can provide to remedy some of these issues. I am hopeful that the additional PPP funds approved by Congress yesterday will be more accessible to our nonprofits this go round. Others are not so optimistic.