2020 has been a year like no other—for small business owners in particular. A mix of innovation, adaptability, and hard work has kept the doors of many small businesses open during the pandemic, assisted by lending institutions and the Paycheck Protection Program (PPP).
Small business owners tend to be scrappy by nature, but these last few months have tested the resolve of even the most resilient of them. An uptick in COVID cases resulting in widespread shutdowns, ongoing economic uncertainty, and sobering job losses have taken their toll. And with holiday expenses piling up, entrepreneurs are stuck in limbo as they await the rollout of the second round of PPP.
In fact, according to a July survey from the National Federation of Independent Business, almost half (46%) of PPP loan borrowers also anticipated needing additional financial support over the next 12 months. Uncertainty around a second federal stimulus hasn’t helped. Many need a financial lifeline—and fast.
Here’s the good news: This time around, small business owners are positioned to get a bigger piece of the PPP pie. On December 1, a bipartisan group of senators introduced a $908 billion Covid-19 stimulus package, with $288 billion earmarked for PPP and other small business aid.
In the first round, only 5% of small businesses that applied received a PPP loan. The $349 billion of funding ran out in less than two weeks, with only a small fraction of aid going to small businesses, and a disproportionate amount distributed to business behemoths. Many struggling small businesses that didn’t have existing relationships with SBA lenders didn’t get loans.
Though PPP funds are expected to be replenished—the question is not if, but when, small business owners who dealt with a burdensome application process and confusion about the program in the spring brace for the same questions in the next round of stimulus. That means lenders need to get their systems fine tuned—right now—before the next rollout begins.
So how exactly can lending institutions make their systems more small business-friendly? Adopting an end-to-end small business lending platform, like LendingFront, can make the application process remarkably efficient and convenient. Here’s how to get started:
- Automate the application process: By putting your application online, you can help small businesses bypass some of the logistical headaches. Automating cumbersome paperwork instead of manual approval and underwriting relieves some of the time pressure on small businesses eager to get their applications in quickly. An end-to-end solution also helps earn the trust of business owners by adding a layer of transparency to the process.
- Optimize the application: Digital uploading capability streamlines the application process, and helps applicants submit documents faster. Any necessary financial and identification documents can easily be stored and accessed in an online portal, simplifying otherwise drawn-out and tedious paper-based exchanges.
- Take a proactive approach to problem-solving: Over half (57%) of small business owners cited inconsistent communication from banks and lack of clarity about documents, including difficulty gathering all the required paperwork, as an issue during the first round of PPP, according to a LendingTree survey of 1,260 small business owners. Small business owners will appreciate an efficient lender who accelerates the application process.
Small businesses need lenders to step up, now more than ever. Don’t let your application process be yet another obstacle that stands in the way of small businesses accessing much-needed capital for operations—let alone their survival. As valued members of their local communities, lending institutions have the power to make financial relief more accessible.
See LendingFront’s PPP solution in action (and currently available to lenders at no cost or obligation). Go to www.LendingFront.com/ppp and fill out the form.