On June 19, the SBA announced “enhanced transparency” measures for the PPP program. In its statement issued on the sba.gov website, the agency said that they “will disclose the business names, addresses, NAICS codes, zip codes, business type, demographic data, non-profit information, jobs supported, and loan amount ranges” for all businesses who received PPP loans of over $150,000. For those businesses whose PPP loans were less than $150,000, the SBA has released aggregate data, which can be viewed here. Banks and credit unions who processed the SBA loans do not release such information. The full download of company data for those who have received PPP funding is here. The file is approximately 130MB.

Why Release Business Data?

The announcement by the SBA comes on the heels of some controversy involving businesses the average American might not consider to be “small businesses”, despite the fact that those businesses fit the categorization criteria of the SBA. Even more controversial were businesses with big bank accounts or backers who applied for and received the PPP funds, despite relatively clear knowledge that the business had no need for the funds — or at least much less need than smaller, harder hit businesses — when many smaller businesses applied funds, but did not receive any. Finally, some businesses who received PPP funds have fairly close ties to certain politicians, giving at least the appearance of favoritism. Thus, the SBA and bipartisan members of Congress agreed that the names and other data about the businesses who received larger loans would be released.

What Data is Being Released?

For loans of $150,000 or more, the SBA released the following data:
  • Business names
  • Addresses
  • NAICS codes
  • ZIP codes
  • Business type
  • Demographic data
  • Non-profit information
  • Number of jobs supported
  • Lender name
The actual loan amount for each business was not disclosed. Instead, the dollar amounts disclosed in the following ranges:
  • $150,000-$350,000
  • $350,000-$1 million
  • $1 million-$2 million
  • $2 million-$5 million
  • $5 million-$10 million
Loans of more than $150,000 account for nearly three-quarters of the dollar volume of PPP loans. For PPP loans less than $150,000, the SBA did not release business names, but did report loan totals, aggregated by ZIP code, by industry, by business type, and by various demographic categories. These loans account for the large majority of the total number of loans. That report is available here.

What Do You Need to Do?

Ben Brazell, Chief Administrative Officer at First Reliance Bank in Florence, SC, commented about how First Reliance is handling the release of their customers’ information: “We view this release by the government agencies as our opportunity to be an advisor to our business customers. They need to know — and most of them do not know — that the government is publicizing their business information under the specific context of having applied for and received a PPP loan. We’re taking the proactive approach of helping businesses get in front of any public relations issues that may arise because of their participation in the PPP.” Brazell added, “We’re an intermediary in this transaction between the SBA and the business, and the government has made the decision to make PPP borrowers known.” At this point, there is very little any business can do, if they’ve received a PPP loan for more than $150,000. The government has released that information. Business owners, more than anything, simply need to be aware of that release, and that it is the government who is releasing the information, not the lenders.
With a huge percentage of the 30,000,000 US-based small businesses expected to apply for the PPP, execution is critical. It happened. A new, particularly strong virus quickly bloomed into a global pandemic. While the Federal Government's response was timely and well-funded, a lot of loose ends were left with regards to execution, specifically regarding the technology needed to execute. Businesses were encouraged to apply for the SBA Payroll Protection Program (PPP) starting last week. More importantly, they were encouraged to apply for the loan through their existing banking relationship.

Unprecedented Demand

A loan that becomes a grant and allows a business to cover payroll while shut down? Who wouldn't apply? The SBA estimates there are roughly 30,000,000 small businesses in the United States. According to the Independent Community Bankers of America's President & CEO, Rebecca Romero Rainey, "Community banks make 60 percent of small business loans." While estimates of the SBA's total loan volume processed annually prior to the crisis rest around $20 billion annually, the PPP program authorizes $349 billion, and that money is to be deployed immediately.

Inadequate Tools

While no one doubts the program is well-intended, community bankers are in an awkward position. They have been positioned by government and the press as the saviors of small business (through their access to these funds). However, their ability to help is severely hampered using their current tools. Romero continues: "Community bankers have always been there to meet their customers' needs, and to be faced with a situation like they experienced today--in which they were unable to access the SBA programs promised to America's small businesses due to failed technology links and portals--has been beyond stressful and disappointing." While a new portal has been promised, it has not been delivered. Banks with access to E-Tran have reported "significant challenges with user access and latency in application processing."

A Looming Threat

While community bankers continue to pressure their contacts at the SBA and Department of Treasury for solutions, rumors are swirling that two of the stronger Fintechs, PayPal and Square, may be granted special privileges to provide electronic loan applications for the PPP. With significant user bases on both the consumer and business sides of the market, Square and PayPal both stand to become even more disruptive to community banks.

A Generational Opportunity

While there are certainly problems to solve, there is also an enormous opportunity to provide assistance to small businesses in their darkest hour. Not only will community banks that successfully deliver PPP funds to their clients attain hero-status indefinitely, they also stand to make significant gains for their shareholders as $349 billion in loans are rapidly deployed to the market. Banks that want to address this crisis head-on should look to Fintech as well, but choose a partner that works collaboratively with financial institutions, always looking to provide additional capabilities while keeping the bank at the center of the business client relationship. FINSYNC is that partner. FINSYNC's electronic loan application is plug and play. Additionally, the application feeds into the bank's connected Lender's Portal, a cloud tool for processing and underwriting loan applications. The best part...a bank can deploy FINSYNC's solution in 24 hours, with no IT integration required. Is your bank ready to start helping businesses in need? Join the FINSYNC Network today.
The Covid-19 crisis has created unprecedented opportunity to launch a virtual accounting practice. With the pandemic of Covid-19 and the Federal Government's response to an economic downturn expected to dwarf the sub-prime crisis of 2008, there has never been a better time for accounting professionals with the right skills to help get the nation back on its feet.

Tidal Wave of Applications for the SBA Paycheck Protection Program (PPP) Expected

Ask any small business owner what's on their mind in the midst of shelter-at-home, and their responses will be similar. The health of their family followed very closely by the health of their business. With shelter-at-home keeping consumers from purchasing goods and services across so many industries, unemployment rates have already skyrocketed. The CARES Act, and specifically the PPP, could not come sooner. However, not unlike the HealthCare.gov fiasco, there is already confusion about how to apply to secure the financing. With PPP, a business can secure financing that becomes a grant. As long as the business continues to pay employees in accordance with the program's requirements, the government will forgive the loan. Free money. What business owner wouldn't apply? The opportunity is fantastic, but the application process leaves a lot to be desired. The forms and documentation are so complex that a small business owner without a strong financial education has little chance of completing them correctly without assistance. An incorrect application could lead to delays in receiving the loan deposit of several weeks. Businesses who complete the form correctly the first time can have funding in as few as 2 days. A very high percentage of 30,000,000 small businesses will apply for this program in the coming weeks. That's where you come in.

The Crisis is Unprecedented, the Method of Work is Not

How do you serve small businesses in this time of need? Virtually. The market for professional services has been trending towards virtual services for some time. Business owners have used virtual services in marketing technology through publicly traded companies such as Upwork and Fiverr for quite a while. Businesses use Uber to navigate business trips. FINSYNC has developed its Services Network specifically to solve the need for professional, vetted financial assistance for US-based companies. Businesses simply request services through the app, and, based on their needs, get matched to the professional best suited to their requirements. That professional could be you.

The Tools Are Readily Available

While taking first steps into the virtual, gig-economy may seem frightening at first, it's a lot more personal than you might think. Google, Zoom and others provide free tools for video conferencing. FINSYNC service providers have access to its business software that includes Payments, Accounting, Payroll, Projects, and, most importantly in the current economic climate, Cash Flow Management. FINSYNC also makes its services portal available so that you and your new business customer can communicate virtually, with activity tracking, commenting and document management all simplified and at your fingertips.

Get Started in VIRTUAL ACCOUNTing

To get your virtual accounting career started, simply complete your 10 minute application.  There's no cost to apply or become a FINSYNC Specialist. You'll be paid via direct deposit for your work helping businesses navigate the SBA application process. You'll also have the opportunity to earn future work when normalcy returns to the economy and businesses need all your other amazing skills!
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