Virtual panel: limited access for small businesses to SBA funds
On Friday, April 24th, the first of a series of virtual panels was live streamed, as part of Foundation for Puerto Rico’s (FPR) efforts to keep the island informed, particularly the business ecosystem, on the effects of the pandemic at a local level and the current aids for small and medium-sized businesses (SMBs) in Puerto Rico.
Moderated by journalist Julio Rivera-Saniel.
On the panel “SMBs limited access to SBA funds,” experts discussed the obstacles business owners have faced in accessing U.S. Small Business Administration (SBA) loans locally. Jorge Silva Puras, attorney and former administrator of the SBA Regional Office for New York, New Jersey, Puerto Rico and the United States Virgin Islands, began by presenting statistics from the government agency, where it established that Puerto Rico has only received three of more than 26,000 loans nationwide. As well, Pablo DeFilippi, senior vice president of Membership and Network Engagement of Inclusiv, elaborated on the controversy surrounding the exclusion of cooperatives on the island in order to participate in the first round of SBA aid. Likewise, he informed that unlike the first round, in this second stage, eight cooperatives certified as SBA Lenders will be able to participate. These are the following: CamuyCoop, Caribe FCU, CooPACA, Cooperativa Jesús Obrero, Cooperativa Oriental, Cooperativa Zeno Gandía, MaunaCoop and VegaCoop.
Nerma Albertorio, executive director of Centro para Emprendedores, shared her experience of supporting 33 local SMBs in the process of applying for SBA grants under the Payment Protection Program, where only 10 were approved. She also elaborated on the problems they faced with commercial banks and lenders, due to not having the infrastructure and knowledge to process these requests in an agile and efficient manner, directly affecting the business owners. Finally, Annie Mayol, president of the Foundation for Puerto Rico, emphasized that the business should begin its process in the banking institution where there’s already a business relationship. In addition, she highlighted the importance of not requesting your loan under this program in more than one bank at a time, since it can be counterproductive. She concluded by underlining the importance of affected businesses that are requesting financial aid in seeking and obtaining technical assistance from non-profit organizations such as Centro para Emprendedores and FPR, among others.
Businesses with fewer employees should have priority, following the principle that SBA and its loans require.
Commercial banks and cooperatives must be more agile and prioritize how to get small businesses to gain access to these grants and, therefore, to capital.
Businesses need to ensure they have their documents ready, including their financial statements, in order to move fast and apply.
Technical assistance is essential, not only for the process of how to apply for this aid, but also to ensure that once the aid is obtained, they can use the capital in the most efficient way possible, overcoming this crisis.