Monday, April 27, 2020
The PPP was included in the CARES Act, an emergency stimulus package passed to deal with the economic fallout from mandatory stay-at-home orders issued to stop the spread of COVID-19, the disease caused by the new coronavirus. It provides loans guaranteed by the SBA to small businesses that have been impacted by the pandemic to help them keep workers employed. The loans can be forgiven, thereby effectively transforming the money into government grants, if recipients can show that at least 75 percent of the money was used to meet payrolls. But much of the original batch of money didn’t make it into the coffers of small businesses. The Wall Street Journal reported that at least 150 publicly traded companies received loans from the initial round of PPP funding. An analysis by Morgan Stanley identified $243 million in loans that went to publicly traded companies, including millions of dollars to restaurant chains and technology companies.
The restaurant chain Shake Shack, which boasts a market capitalization of $1.9 billion, received a $10 million PPP loan; the car dealer AutoNation received $77 million. Some of the companies that received funding, including Shake Shack and Auto Nation, returned or promised to return the money, and in guidance released last week, the SBA made clear that PPP loans are not intended for companies with access to capital markets.
“[B]efore submitting a PPP application, all borrowers should review carefully the required certification that ‘[c]urrent economic uncertainty makes this loan request necessary to support ongoing operations’,” the SBA wrote. “For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith.” The SBA gave public companies that received money from the first round of PPP funding until May 7 to return that money.
In a statement released on April 17, the SBA and the U.S. Treasury Department reported that the first round of PPP funding provided payroll assistance to more than 1.66 million small businesses in all 50 states. “The vast majority of these loans – 74 percent of them – were for under $150,000, demonstrating the accessibility of this program to even the smallest of small businesses,” the statement noted. Loans were made to companies “in all sectors of the economy, including construction, manufacturing, food and hospitality services, health care, agriculture, and retail, among many others,” the SBA and Treasury stated.
The SBA reported that there are just over 30 million small businesses in the United States. The SBA defines a small business as a firm with fewer than 500 employees, although there are exceptions. Most small business, however, have far fewer than 500 employees. In all, small businesses employ about 59 million workers, or about half the nation’s active workforce, according to the SBA.
The PPP has generated significant interest from merchant acquirers and their partners. Nearly 1,000 payment professional tuned in to a webinar presented on April 3 by CCSalesPro that examined opportunities for acquirers, ISOs, agents and their merchants to benefit from PPP loans. A replay of that webinar is now available online at www.youtube.com/watch?v=JQUnltRrq00&t=157s .
Several merchant services companies have rolled out programs to assist merchants with the PPP loan process. In many cases, these companies are partnering with Womply, which specializes in providing marketing data and software and is an approved SBA loan agent. Acquirers partnering with Womply include Payroc, Fattmerchant and Clearent.
“We are not a lender, but we can connect small businesses with lenders faster than anyone,” said Cory Capoccia, Womply’s president and co-founder. “Time is of the essence for millions of businesses at imminent risk of dying.” Womply’s lead lending partner is Cross River Bank, a New Jersey-based bank with a strong technology bent.
“Our partnership with Womply offers our merchants a fast-tracked PPP application process and relieves them of barriers they might encounter if they were to apply elsewhere,” said Sal Rehmetullah, president of Fattmerchant.
Small business lender Reliant Funding also is working with Cross River Bank to facilitate the PPP loan process. “We’re committed to helping small businesses get back on their feet after this pandemic is over, and we know our partnership with Cross River will create a seamless application process that will do just that,” said Adam Stettner, Reliant’s CEO. 
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