President Donald Trump signed into law on Friday an additional $320 billion to refill the Paycheck Protection Program (PPP) that includes $60 billion set aside for smaller banks that lawmakers say gives women-owned businesses affected by the COVID-19 pandemic a better chance at securing funds.
The Paycheck Protection Program and Health Care Enhancement Act follows the original $350 billion PPP that ran out of money in less than two weeks. It was heavily criticized for allowing large companies to take in much of the funding at the expense of companies such as small and midsize trucking firms.
In the latest version, women and minority trucking businesses will be able to take advantage of loans aimed specifically at community banks, credit unions and minority depository institutions with smaller asset bases.
“Women struggle to access capital, which is why these smaller institutions are better at getting capital to women-owned small businesses,” a Democratic Senate aide familiar with the legislation told FreightWaves. “We saw how quickly the PPP was used up. With this $60 billion set aside that serves this population, there’s not going to be the same rush for that money.”
The aide noted that small business loans through community banks have been an important way for female entrepreneurs to finance their businesses. According to a 2017 study by the U.S. Senate Committee on Small Business, under the Small Business Administration’s (SBA’s) “7(a)” and “504” small business loan programs, lending to women increased by 150% “due in part to SBA’s targeted efforts to increase access to small dollar loans to help entrepreneurs who lack access to traditional lenders.”
“I’m glad the government is focusing on women-owned businesses; we have many of them as members,” commented Ellen Voie, president and CEO of Women in Trucking. Voie said that of its 5,400 members, 544 are corporations, and of those, 56 are certified Women Owned Businesses.
Rebecca Teague, who runs Rebecca’s Transport LLC, said the first round of the PPP program ran out of money before she could apply. She said she plans to apply for the next round.
Right now, she said, “the rates are so low, it’s not worth going out because the costs to run the business are still there, so after buying fuel, you’re running the truck for free,” the southwest Georgia owner-operator told FreightWaves.
According to the U.S. Treasury Department, the SBA will resume accepting PPP loan applications on Monday at 10:30 a.m. EDT from approved lenders on behalf of eligible borrowers. “This will ensure that SBA has properly coded the system to account for changes made by the legislation,” the agency stated.