The Progress Fund remains open for business, of course with precautions, due to our status as a Life-Sustaining business providing non-depository financial services to small businesses.
This has enabled us to operate at full-throttle and help our borrowers access loans from both the new Paycheck Protection Program from SBA and the COVID-19 Working Capital Access program (now closed to new applications) from the Commonwealth of Pennsylvania.
There are a lot of news stories and posts about the programs, but we want to share our unique front-line viewpoint from helping our borrowers get these loans.
The PA Department of Community and Economic Development should be commended for its COVID-19 Working Capital Access program. DCED acted early and fast with the $61 Million it had. The Progress Fund was able to quickly get seven (7) applications submitted to DCED for our current borrowers. But by the just the third day from the start of the program, DCED stopped accepting new applications. It had run out of money. DCED is currently underwriting those applications. As we learn more, we will keep you informed.
The SBA’s Paycheck Protection Program (PPP) similarly rolled out fast and with potential to help small businesses. In the case of the PPP, it is specifically about retaining personnel. If a business does not comply with the requiring employee retention aspects of the loan, the loan will not be forgiven, which is the attraction of the program. The conditional forgiveness is potentially problematic for the financial institutions accepting applications. Most people don’t realize that money loaned to the small business is not the SBA’s. It is the bank’s money, and in our case, the capital of The Progress Fund. If the business fails to follow the stringent Federal requirements, the loan is not eligible for forgiveness. The borrower is then on the hook to repay the lender. This puts the lender at risk and why the vast majority of lenders are only accepting applications from businesses they have an established relationship to make a better risk assessment. For the foreseeable future, or until the SBA changes the process, we are telling businesses to work with lenders that they have an ongoing relationship.
As for us, as of today, Monday, April 13, The Progress Fund has submitted 28 Paycheck Protection Program (PPP) applications to the SBA from our borrowers totaling $1,612,100. 23 applications have received formal approval from the SBA and we are moving them rapidly to closings. Eventually, we expect all the other applications to be approved.
We want to thank our partners that played a critical role in our ability to help get these loans made. A big shout-out goes to:
- Shannon Jefferson, Lyra Lender Servies
- Dan Betancourt and his team, Community First Fund (CDFI)
- Cahill, Wilinski, Rhodes and Joyce, PC, Attorneys at Law
- Angel Marschik, SBA Pittsburgh District Office
- Kelly Hunt, SBA Pittsburgh District Office
- Jean Tucker, SBA Office of Capital Access
- David Miller, Enterprise Bank
- The R.K. Mellon Foundation
- Jared Lucas and team, PA Department of Community and Economic Development
- Commonwealth Financing Authority of Pennsylvania