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In the wake of the first round of PPP loans, GFGF co-hosts describe some of the issues that big banks had in administering the loans – and why Community banks may be a better option. With Congress releasing the second phase of a stimulus package for small businesses, it’s more important than ever to make sure your business has everything in place (even if you don’t need a loan). In today’s episode, we discuss a personal experience in applying for the PPP funds and how Main Street Bank was supportive.
Show Overview:
At the beginning of the COVID-19 pandemic, the US government offered forgivable loans to small businesses. When $349 billion was set aside for small businesses under the Payment Protection Program, on a supposed first come first serve basis, there was hope for economic relief. Unfortunately, this was not the case for many small businesses.
In this episode, GFGF co-hosts talked about the issues that big banks had in administering the loans and why building a relationship with community banks may be a better option.
About GFGF:
The Get Found Get Funded podcast is at the intersection of entrepreneurship and social justice where we focus on entrepreneurship as a possible path to wealth creation — specifically for Black and Latinx communities.
Key Takeaways:
- The complications of the distribution of PPP loans in 2020
- Large banks show preference to their larger small business in the first round of PPP loans
- Describing the what a Community Bank is and how it can help small businesses during COVID
- Nothing beats the assurance of knowing that you truly have a banking partner
Timestamps:
00:00 – Intro
01:00 – PPP Loan Distribution
08:59 – Big Banks Struggle with Influx of PPP requests
12:49 – Working with Bankers During the Pandemic
15:20 – Having a Relationship with a Community Bank
20:15 – What to Ask When Looking for a Bank
25:20 – Second Round PPP Projections
27:03 – Know Your Numbers and Have Them Ready
31:00 – Get Your “Ish” Together
32:00 – Outro
Items Mentioned in the Show
Quotes from the Show:
- “99.9% of all businesses in the US are characterized as small businesses ... Because the SBA says small businesses might have up to 500 employees, and they might make 10s of millions of dollars. So that's a pretty large definition. But we know that 80% of small businesses have just one employee.”
- “Some banks weren't ready for this, no matter how big they are, were some banks were just not ready for the influx.”
- “The first round was painful for everyone. It was launch, rollout and exhaustion across small businesses and just businesses in general … This goes to a systemic issue that is permeating through the small business community and we have to figure out how to adjust”
- “Building that relationship with your banker is now really critical. There are new policies, there’s new buckets of money, there are new ways of financing.”
- “There is a real opportunity to have a relationship with community banks that perhaps people in our community haven’t had before.”
- “Growing up, I wasn’t taught to have a relationship with the bank. It might be the reason some other small Black-owned businesses are in the same boat that I’m in … Because of the pandemic, and as I am trying to seek these funds, I’m realizing how important it is to have a relationship with your banker.”
- “It is not just about creating a relationship with your bank. Your banker also needs to have power.”
- “Nothing beats the assurance of knowing that you truly have a banking partner.”
