Small businesses in Arkansas can again turn to the state’s Quick Loan program for working capital while they continue to apply for state assistance.
Governor Asa Hutchinson contributed an additional $ 1 million to the state instant loan fund, which was set up in March to provide $ 25,000 in loans to small businesses with fewer than 50 employees.
According to statistics from the State Department of Commerce, government loans helped maintain 2,500 full-time jobs and another 1,000 part-time jobs. Arkansas issued 246 bridging loans before the $ 5 million ran out in mid-April. The average loan was $ 20,325.
“The increased funding will allow us to approve additional applications that will be considered this week,” Secretary of Commerce Mike Preston said Tuesday. “Given the size of the funding and the number of eligible companies with applications in the pipeline, the average loan amount will decrease as we add remaining funds to help more small businesses.”
About 100 small businesses lined up to get government funding when the fund ran out. The $ 1 million replenishment should meet their needs, the governor said when announcing the contribution on Friday.
“That should be enough for the extra loans that were secured and not met,” Hutchinson said.
Arkansas bankers, meanwhile, reported that they had continued difficulty sending loan applications to the U.S. Small Business Administration for approval on Tuesday. The SBA loan portal crashed on Monday on the opening day of a new round of financing.
It was another hit-or-miss process on Tuesday with state bankers reporting minor improvements, despite overall saying that the SBA portal was still slow and time-consuming.
Simmons Bank reported that the portal was inaccessible for about 90 minutes at noon. “We had a good day [Tuesday] despite ongoing challenges with the system, “said Mark Wilson, director of SBA lending at Simmons Bank. E-Tran was up but slow in the afternoon, Wilson said.
Bank OZK said it has more than 2,000 small business loans that it is working on entering but is having trouble accessing the SBA portal.
“Due to the technical problems on the part of the SBA, we have unfortunately only received about 150 applications through the system since the approval of the new financing round,” said Chief Administrative Officer Tim Hicks on Tuesday.
The Arkansas Bankers Association estimates there are approximately 13,000 small businesses in the state seeking assistance from the state Payroll Protection Program.
To obtain a loan with paycheck protection, applications from small businesses must be routed through a lender with access to the SBA’s E-Tran application portal. This online portal is still not working as it is overcrowded with requests
On Tuesday, the SBA notified lenders of new requirements to ease the burden on the E-Tran system. The agency said Robotic Processing Automation (RPA) could no longer be used to submit loan applications for the paycheck protection program.
Robotic inputs “put a strain on the processing system and reduce its capabilities,” SBA said in a statement to banks and financial institutions. “Without RPAs, the loan processing system will become more reliable, accessible, and fairer for all small businesses.”
As of Tuesday afternoon, the SBA reported that it had approved more than 475,000 paycheck protection loans submitted by more than 5,100 lenders. The loan volume has quadrupled since Monday when the SBA reported that more than 100,000 loans were approved for more than 4,000 lenders.
At the state level, Quick Loans offer up to $ 25,000 per company, based on weekly payroll. Once submitted, applications go through an expedited process that includes final Preston approval.
Government bridging loans are zero-interest and are designed to give businesses breath while they pursue larger SBA loans of up to $ 10 million. “We have had very encouraging feedback and companies have found that these funds will allow them to stay up and running,” said Preston.
Business on 04/29/2020