Paycheque Protection Program a Success in the Region

The Federal Reserve Bank says the recently completed paycheck protection program was largely successful in helping small businesses despite a slow start and criticism of how the program initially provided loans.

The report, released last week by the Fed’s St. Louis branch, which includes Arkansas, noted that “the first indications are that [PPP] the programs worked as planned and supported the country’s small business infrastructure during a period of great uncertainty and high unemployment. “

The program began in March 2020 under President Donald Trump and was part of the Coronavirus Aid, Relief and Economic Security Act. As the pandemic continued to ravage the economy throughout the year, the loan initiative was extended two more times.

The PPP was set up so that banks and other financial providers could help small businesses receive forgivable loans through the US Small Business Administration. The goal was to give businesses – many of which have been forced to shut down to prevent the spread of the virus – the funds to pay rent, utilities and, most importantly, wages to keep workers on their payrolls.

“While some bankers and borrowers have said that the implementation of the program was a bit difficult and there are still uncertainties about the number of jobs ‘saved’ and loan forgiveness, the PPP is widely viewed as a success,” notes the Fed report.

Initially, access to the loan was limited to companies with fewer than 500 employees, including contract workers. The loans covered up to two months of payroll and were capped at $ 10 million.

The program has been adjusted several times as federal administrators took steps to try to get money into the hands of the businesses that needed it most – small businesses operating in financially underserved rural areas.

For example, the program first allowed companies to allocate 75% of their PPP loans to salaries to qualify for loan forgiveness. As the program was extended, this threshold was reduced to 60%.

And companies have had more time to spend the funds. Additionally, at the time the third round of financing was approved in December 2020, only companies with fewer than 300 employees were allowed to apply for PPP loans.

In addition, funds have been set aside for banks and other community development financial institutions specializing in serving minority and rural businesses located in low and moderate income communities.

As the program has been refined, it has become more effective in reaching the small businesses that need it most, the Fed has found.

The vast majority of loans approved this year went to companies with fewer than 10 employees, according to the report.

The hardest hit sectors, hotels and restaurants, swallowed up the largest share of PPP loan dollars at 15%, followed by construction at 12%, health care and social assistance at 10%, and professional, scientific and technical services, also at 10%.

About 90% of PPP loans approved in 2021 were $ 50,000 or less, accounting for nearly a third of all loans made this year, according to the Fed. The average size of a P3 loan approved in 2021 was $ 42,000, compared to $ 206,000 in the first round of the program.

The loans ended on May 31, and the program is credited with helping save more than 7 million businesses, according to the SBA. The agency also reported that around $ 800 billion in loans were approved – all fully forgivable – over the program’s three funding cycles.

ACCELERATOR INVITES CANDIDATES

The Conductor, an entrepreneurial support organization in Conway, is accepting applications for its fifth cohort in the 10X Growth Accelerator program. Applications are due July 5 for the cohort starting August 10.

The 14-Week Accelerator Initiative helps high potential tech companies established and based in Arkansas. Participants should be growth-oriented start-ups with an average annual income of $ 100,000 to $ 10 million.

Alumni businesses are reporting measurable growth in income, sales and jobs created after the program starts, according to Conductor officials. Survey results show that 100% of alumni businesses said the 10X Growth Accelerator is a valuable program for the state’s scalable businesses.

RURAL DEVELOPMENT

State and federal economic development experts are inviting rural small business owners to a conference Friday to learn more about creating jobs in their communities.

The Southwest Arkansas Rural Business Development Conference will be held virtually via Zoom from 8:30 am to 12:30 pm The initiative will provide rural residents with the skills and tools to grow their small businesses.

For participants without access to a computer, the conference will also be held remotely at the Nevada County Library, 121 W. Main St. in Prescott.

Under the theme “Using Existing Resources and Creating Innovative Approaches to Rebuild Rural Arkansas,” the conference will include 20 private, state, federal and nonprofit organizations. Their goal is to give entrepreneurs and small businesses the resources to start and grow their businesses.

Topics will include establishing effective business relationships, securing adequate capital and how to sell goods and services to government,

Space is limited. Registration is available by calling Arkansas Human Development Corp. at (800) 482-7641 or (501) 374-1103, ext. 10, or online at https://bit.ly/2tuT7Qh.

The event is funded by the Arkansas Department of Workforce Services, the Arkansas Human Development Corp., the Arkansas Center for Small Business and Technology Development and the US Department of Agriculture.

WRITING ASSISTANCE

Need to hone your business writing skills?

The Arkansas Community Bankers Association is offering four opportunities Wednesday afternoon to help add some sparkle to business relationships and communications.

Ninety-minute sessions, conducted virtually, will be held from noon to 3 p.m. decision-makers, both internally and externally.

The sessions will help participants deliver complex information in a clear and precise manner while learning to use appropriate tone and language, as well as correct grammar, for the intended audience.

Participants will receive a practical test of their writing skills.

Within two weeks of viewing the live or recorded webinar, each participant can submit a written sample (five pages maximum) to a professional writing coach for review, criticism, and commentary.

More information is available at arcommunitybankers.com.

Ideas for columns or recommendations? Any thoughts or reflections to pursue? contact me at [email protected] or at (501) 378-3567.

Source link

About admin

Check Also

Portugal is the most vaccinated country in the world because its people trust its free healthcare system

Last weekend, Portugal ranked first in the world for its COVID-19 vaccination rate, with 85% …

Leave a Reply

Your email address will not be published. Required fields are marked *