Amalgamated Bank is urging Congress to act swiftly to support the more than 30 million nonprofits and small businesses that were unable to access the first round of Small Business Administration (SBA) Payroll Protection Program (PPP) loans. According to the SBA, the PPP is no longer accepting applications due to funding being exhausted. At Amalgamated Bank, we find that wholly unacceptable and are calling on Congress to act now to provide the resources critical to our economic fabric, including additional funding for healthcare workers and local municipalities working with next to no resources in the fight against COVID-19.
The COVID-19 crisis has caused unprecedented stress to our economy. While it was positive that Congress came together in a bipartisan way to support small businesses and nonprofits, the program was fraught from the beginning. It was clear from numerous reports in the media, that the process was plagued with technical and systemic challenges leaving many in the dark. Also, the innerworkings of the program incentivized large banks to favor their own clients, specifically only those with existing loans. This meant that large companies - many registered outside of the U.S. - were favored over neighborhood businesses and grassroots nonprofits. It is no surprise that the SBA reported only 1.6 million businesses were able to access funding. Thus, the spirit of the Payroll Protection Plan program was not realized in its implementation.
The pain is particularly deep for nonprofit organizations, especially those led by people of color and those working in marginalized communities feeling the greatest impact of COVID-19. Nonprofits have not traditionally had access to SBA programs and it is clear the SBA was not positioned to serve them in an equitable fashion. Nonprofits faced additional challenges navigating the process that is opaque and challenging. Their limited borrowing relationships and the lack of details in the repayment language only made it harder.
That is why we are calling on Congress to act now to provide additional resources to the PPP and ensure that nonprofits and truly small, community based businesses, have equitable access to these necessary funds. There needs to be a clear carve out for nonprofits, microenterprises, CDFIs, and others who have not had access to SBA programs in the past. Congress should set clear guardrails to keep those most in need at the front of the line and limit those larger, foreign registered entities from applying.
Lastly, to our clients who are still in need of funds, we will never stop advocating for your needs and are standing with you to push the government for more direct resources to support your operations and the vital role you play in our society.