Managed services News
Paycheck Protection Program: 5 Things You Need To Know
Steven Burke
CRN spoke with solution providers regarding their experience with the Paycheck Protection Program. Here is what we found.
A Small Business Administration Not Prepared For Onslaught
The SBA lacks the infrastructure and scale to support the tens of millions of small businesses in the U.S. looking for relief from the Paycheck Protection Program.
“The whole problem is the government is using an SBA loan infrastructure that was not designed for this kind of crisis,” said a channel executive who did not want to be identified. “Banks just can’t write the volume of SBA loans that are required here in such a compressed time frame.”
The SBA loan program is designed largely to support smaller community and regional banks—which are used to providing SBA loans. In this case, banks across the country—including the megabanks—made a mad dash to grab a share of the PPP funds. “Those big banks are being bombarded with applications they can’t fulfill because they don’t have the infrastructure in place,” said a channel executive who went through the process. “I think the SBA and government was trying to do the right thing here, but the banks were not prepared for this. The banks should have been provided some assistance to get the loans approved and processed for small businesses.”
Barry Shevlin, CEO of Vology, No. 173 on the 2019 CRN Solution Provider 500 with 200 employees, said Vology received approval and funds for the PPP loan by working closely with Skyway Capital Markets—a midmarket Tampa, Fla., investment firm that is working with solution providers to obtain the coronavirus relief.
“Skyway has close ties with community banks,” he said. “They have a lot of small-bank experience and are finding success. The big banks can’t get out of their own way. Skyway is helping small businesses get to the front of the line at banks that have the back-end processes to process these loans. They have been very successful. The key is stay away from the bigger banks and find the smaller banks that have the capacity to process these loans.”
Shevlin said it is the smaller banks that have deep knowledge and understanding of the SBA, and SBA loans are better positioned to help solution providers. “Those are the banks that are being successful,” he said. “These small banks have the infrastructure in place to handle these loans.”
Learn More:
Coronavirus
