Public Servants Supporting Our Community with PPP Loan Forgiveness

Public Servants Supporting Our Community with PPP Loan Forgiveness

Our Small Business Initiatives team at Raza Development Fund consider ourselves public servants who strive to do everything we can for our clients and our community. Now that the Small Business Administration’s Paycheck Protection Program is over, we are assisting our PPP clients through the loan forgiveness process.

To date, at least 50% of RDF’s 489 PPP clients have either received full loan forgiveness or submitted for forgiveness.

For our clients, this allows them to continue stabilizing their business with peace of mind. For us, it brings us a sense of accomplishment knowing we were able to help a small business owner think about their immediate and near future goals.

“I’ve had many clients tell me they were very stressed out and losing sleep over the forgiveness application and were very relieved when they were able to receive their confirmation payment less than a week later,” says Mayra Vargas, RDF’s Consultant who supports the SBI team. “It’s a great feeling to help them get it done so they can focus on everything else in their business and family.”

Importance of Loan Forgiveness

The Small Business Administration’s (SBA) Paycheck Protection Program (PPP) was designed to help small businesses cover payroll and related expenses during the pandemic. This was a lifeline during a time when many small businesses faced major layoffs and permanent closures. The loan itself allowed owners to pay off the remaining debt and gave them a fighting chance.

This lifeline has been critical for so many families and businesses.

For many small business owners, their business is the sole or main source of income for a family unit. For many of our clients, the PPP loan allowed them to pay themselves, which gave them hope to take care of their personal family bills.

As is the nature of small businesses, these owners face multiple economic challenges even with the loan.

Thankfully, the SBA added a forgiveness element to this loan, so they do not have to repay the funds. Small business owners can apply for PPP loan forgiveness after the entire loan amount has been expended either over an 8-week period or 24-weeks, at the discretion of the business owner.

With forgiveness, the small business owner can put their limited resources to use for other things like product orders, expansion, etc.

Our clients, like Art Rubi, owner of Rubi Services, are ecstatic to receive full forgiveness because it gives them relief and a sense of stability to keep moving forward.

In August, the SBA made the process to apply for forgiveness easy with a direct online portal for borrowers to complete their applications that takes only five to 10 minutes and doesn’t require uploaded documents. Borrowers can typically receive a decision between two to five working days.

Our client Jose Plata, owner of Casa de Plata LLC, was one of RDF’s first clients to try this portal and was very appreciative for this easy and simple process.

Clients Have RDF’s Full Support

Even with this direct online portal, our SBI team is still here to help our clients through every step. If a small business owner does not want to use the SBA portal, or is unfamiliar with the technology, our team members help guide them to complete the application.

Our team assists our clients with the technical portion and the government and financial terms that are often difficult to understand.

We host a series of monthly webinars both in English and Spanish to explain how they can apply for forgiveness and the criteria to be eligible for full forgiveness. For example, to receive forgiveness, the SBA requires that owners use a minimum of 60% or up to 100% of loan proceeds to cover employee payroll expenses such as salary and wages and other staff related benefits or if 60% of funds were used for employee payroll, the remaining 40% are required to be used to cover rent, mortgage interest, or utilities.

We also help clients fix errors in their application. For example, we had one client who originally listed zero employees, but needed to include herself. Our RDF team was able to help her correct this so she could receive full forgiveness.

And of course, as the nation’s largest Latino CDFI, we are proud to provide our Spanish-speaking clients with the same level of support. By delivering assistance in Spanish, we help business owners who prefer to conduct business in their own language and is one less barrier they have to confront.

Our goal is to assure all of our small business clients complete their forgiveness application as soon as they are eligible and before the end of the year. This way, our community can look to the future as we work together to thrive.

Francisca Montoya

As RDF's Director of Community Development & Special Projects, Francisca Montoya oversees the PPP program managing all aspects of program operations, including policy and quality improvement to achieve department goals. Previously, Ms. Montoya was employed with Friendly House, Inc., as Director of Strategic Development. Her recent experience includes working with MALDEF as Regional Director for the 2010 Census and Arizona Regional Director of the Cesar E. Chavez Foundation where she was responsible for community relations, corporate fundraising, and program and grants management.

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