Salary protection program recognized as successful in the region

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The Federal Reserve Bank says the recently concluded Payroll Protection Program has been very successful in helping small businesses, despite its slow start and criticism over how the program originally disbursed loans.

A report released last week by the St. Louis branch of the Federal Reserve, which includes Arkansas, noted that “early signs indicate that [PPP] the programs worked as intended and supported the national small business infrastructure in a time of great uncertainty and high unemployment. ”

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

PPPs were created to enable banks and other financial providers to help small businesses obtain forgivable loans through the US Small Business Administration. The goal was to provide businesses, many of which were forced to close to prevent the spread of the virus, with the funds needed to pay rent, utilities and, most importantly, wages to keep workers on their payrolls.

“While some bankers and borrowers said the program was a little volatile, and uncertainty over the number of jobs saved and loan write-offs persisted, PPPs are widely considered to be successful,” the Fed said in a report.

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

The program was revised several times as federal administrators took steps to try to get the money into the hands of the businesses that needed it most — small businesses in financially underprivileged rural areas.

For example, the program initially allowed businesses to channel 75% of their PPP loans to payroll in order to qualify for loan forgiveness. As the program expanded, this threshold was lowered to 60%.

And companies were given more time to spend. Moreover, by the time the third funding round was approved in December 2020, only companies with fewer than 300 employees were allowed to apply for PPP loans.

In addition, funds were allocated to banks and other community development financial institutions that specialized in serving minority-owned and rural businesses located in low- and middle-income communities.

According to the Fed, as the program has improved, it has become more successful in reaching small businesses most in need.

The report says the vast majority of loans approved this year were for businesses with fewer than 10 employees.

The most affected sectors, hospitality and catering, absorbed the largest share of PPP loans at 15%, followed by construction (12%), health and social assistance (10%), and professional, scientific and technical services. also by 10%.

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

The loans expired on May 31, and the program saved more than 7 million businesses, according to the SBA. The agency also said nearly $ 800 billion in loans had been approved in three rounds of funding for the program, all fully forgiven.

ACCELERATOR INVITES APPLICANTS

The Conductor, an entrepreneur support organization based in Conway, is accepting applications for cohort 5 in the 10X Growth Accelerator program. July 5th submission for the cohort starting August 10th.

The 14-week accelerator initiative helps established high-potential tech and technology businesses based in Arkansas. Participants must be growth-oriented startups with an average annual income of between $ 100,000 and $ 10 million.

Alumni companies are reporting notable increases in earnings, sales and jobs since the launch of the program, Conductor said. Survey results show that 100% of alumni companies said 10X Growth Accelerator is a valuable program for scalable companies in the state.

RURAL DEVELOPMENT

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

The Southwest Arkansas Rural Business Development Conference will run virtually via Zoom from 8:30 am to 12:30 pm. The initiative will provide villagers with the skills and tools to expand their small businesses.

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

The conference will focus on “Leveraging Available Resources and Creating Innovative Approaches for Rural Rehabilitation in Arkansas,” involving 20 private, government, federal and non-profit organizations. Their goal is to give entrepreneurs and small businesses the resources to start and expand their businesses.

Topics will include building effective business relationships, obtaining the right capital and how to sell goods and services to the government,

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

The event is sponsored by the Arkansas Department of Human Resources, the Arkansas Human Development Corporation, the Arkansas Center for Small Business Development and Technology and the United States Department of Agriculture.

DIRECTORY

Need to hone your business writing skills?

The Arkansas Bankers’ Association is providing four opportunities Wednesday afternoon to add a little polish to business reports and messages.

The ninety minute virtual sessions will run from noon to 15:00. Sessions are designed to help all staff, from an entry-level employee looking to improve email to a senior executive hoping to convince key decision-makers, both internal and external.

Sessions will help participants communicate complex messages clearly and accurately as they learn how to use the appropriate tone and language, as well as the correct grammar for their target audience.

Participants will receive a hands-on overview of their writing skills.

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

More information is available at arcommunitybankers.com.

Ideas or recommendations for speakers? Thoughts or reflections that need to be developed? Contact me at [email protected] or by phone (501) 378-3567.



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