As authorities advise (or mandate) people to stay home in an effort to flatten the curve of the COVID-19 pandemic, to say that small businesses are suffering would be the understatement of the new decade.
An article published by The Daily Times points out that most small businesses have only 15 to 30 days of cash on hand. As a likely result, according to CNBC, “the disruption to businesses from coronavirus could lead to 15,000 permanent retail store closures in 2020, with the Economic Policy Institute predicting that the disease outbreak could potentially wipe out three million jobs from the U.S. economy before this summer.”
On top of that, CNBC also says that even when the global public health crisis is under control, a lot of companies expect it will take more than six months for their businesses to return to normal.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 (H.R. 748) is the single largest financial support package the U.S. has ever seen. The $2 trillion package was drawn up in an effort to combat the economic damage from the COVID-19 pandemic. Its programs and initiatives include the Paycheck Protection Program (PPP) which initially allocated up to $349 billion for a loan and grant program for small businesses.
The effort known as the PPP is intended to encourage financial institutions to lend funds to small businesses that agree to keep workers on the payroll. Most (if not all) of a loan would be forgiven if the borrow retained its workers and didn’t cut their wages. The government would repay lenders for the forgiven portions of the loans.
New solutions like Jack Henry Lending’s CARES Act Support are trying to make it easier for you to do right by your community – via an automated, all-digital, borrower-friendly approach that can handle significant volume.
By working with Jack Henry Lending, you gain enhanced lending capabilities with the specific functionality your institution needs to immediately support PPP loans and help deliver fast economic relief to local businesses and their employees. You can digitally capture both the application and supporting documents for PPP loan requests, based on SBA guidelines and CARES Act provisions. The technology also includes built-in fraud and risk controls.
For information on solutions designed to help you support your small-business borrowers, download the full whitepaper.