Correction: An earlier version of this story misstated how PayPal’s money was to be used in Philadelphia. The story has been updated.
Black-owned businesses in Philadelphia and across the nation will benefit from a new $530 million commitment from PayPal, the big internet payments company.
PayPal will spend $500 million to create a fund that will directly invest in minority firms and start-ups through its own investment arm, known as PayPal Ventures, and also work with community banks and credit unions that invest in under-represented minority communities.
The Association for Enterprise Opportunity in Washington, DC is overseeing an additional $10 million from PayPal to administer $10,000 grants to 1,000 black-owned businesses across the country.
In addition, Paypal has set aside $5 million in grants to strengthen black business owners by giving them microloans, technical assistance, information, mentoring and access to digital solutions. In Philadelphia, the Women’s Opportunities Resource Center, at 20th and Chestnut Streets, will get a $50,000 demonstration grant connected to this project. The group was one of 10 community-oriented nonprofit lenders to get those grants, including Baltimore Business Lending, Chicago Neighborhood Initiatives microfinance group, and the Nebraska Enterprise Fund.
PayPal also committed to spending $15 million to bolster its internal diversity program.
“For far too long, black people in America have faced deep-seated injustice and systemic economic inequality,” Dan Schulman, president of the firm, based in San Jose, Calif., said in a news release. “We must take decisive action to close the racial wealth gap that sustains this profound inequity.
“We’ve listened to leaders in the black community about the challenges facing black business owners and the support and investments needed to sustain black-owned businesses and create long-term economic opportunity.”
As part of the plan, PayPal will put up $2 for every $1 its employees donate and $10 for every volunteer hour its workers give locally, up to $500,000, according to a news release. The company has about 20,000 employees
It’s been hard for business people to follow all the changing rules in the Paycheck Protection Program without a scorecard — and now the feds are providing a fresh one.
On Wednesday, the U.S. Treasury and Small Business Administration jointly updated the application form for the PPP loans, folding into the form the various ways that the SBA has relaxed the rules in recent weeks.
You’ll recall that the beautiful thing about the loans is that if you use the money properly, they turn into grants — and you don’t have to pay them back.
If you need the money, though, you’d better hurry. The deadline to apply for a loan is Tuesday, June 30.
Philadelphia tax accountants Drucker & Scaccetti said the SBA and Treasury issued updated information on the new borrower application and the various relaxations of the rules, as laid out in what the SBA called the 17th interim final rule (nope, not a typo).
Prepare for more complexity. The latest round of federal advice “only scratches the surface of what is to come” as the impact of the federal tweaking of the original program becomes clearer, the accounting firm said.
If you want to apply, the new application is available on Treasury’s website: https://home.treasury.gov/system/files/136/PPP-Borrower-Application-Form-Revised-June-2020.pdf.
Also, Paychex Inc., a payroll firm based in New York state, issued a helpful forgiveness estimator on its website: https://www.paychex.com/business-loans/loan-forgiveness-estimator. You can enter your loan amount, number of full-time employees, and other data for a ballpark estimate of how much of your loan might be turned into a grant if you play your fiscal cards right. The issue turns largely on how much of the money was used to keep workers on the job.
In a sports analogy, some say that SBA and Treasury are building the stadium while the game is in progress.
The borrower application reflects several key liberalizations on the program. As we have previously reported, two key changes are:
In other changes:
Questions? Direct them to lender relations specialist in your local SBA office, which you can find online at https://www.sba.gov/tools/local-assistance/districtoffice.
Even as the Trump administration loosened the rules on the nearly $700 million program, U.S. Treasury Secretary Steven Mnuchin told Congress on Wednesday that he does not ever plan on releasing the names of borrowers to the public.
Kyle Herrig, president of Accountable.US, a watchdog group that says it focuses on political corruption, says this was a reversal of the administration’s previous position.
“The Trump administration flip-flopped on its commitment,” Herrig said in a statement. “Once again big companies get the red carpet treatment, while American taxpayers are told to pipe down and stop asking so many questions.”