Small nonprofits struggle to access new federal loans

Outside of U.S. Small Business Administration building.
Outside of U.S. Small Business Administration building.
Shutterstock
The U.S. Small Business Administration.

Small nonprofits struggle to access new federal loans

Applicants face overwhelmed banks and fears that they won't be able to get funding in time.
April 7, 2020

Smaller nonprofits have been reporting difficulties applying for a federal COVID-19 emergency loan program that provides small businesses and nonprofits with loans that are eligible to be at least partially forgiven, the Chronicle of Philanthropy reports. 

The National Council of Nonprofits has fielded complaints from organizations that have struggled to access busy bank websites, were confused by eligibility criteria for the Paycheck Protection Program and feared it would run out of funding before they could access it. Small businesses have reported similar problems, such as technical challenges with the U.S. Small Business Administration’s website. And when the program launched on Friday, many larger lenders stopped taking applications and would only process applications for its existing clients. 

These loans, which are available to nonprofits and businesses with 500 employees or fewer, are particularly attractive because they are eligible for loan forgiveness. If the recipient maintains their staffing level for eight weeks, the loan can be partially or entirely forgiven.  

As of Monday morning, the agency had approved 130,000 loans worth $38 billion through the program.

NYN Media reporter Kay Dervesh
Kay Dervishi
is a staff reporter at NYN Media.
20200527