With 30 million American workers filing for unemployment since the COVID-19 pandemic pushed the U.S. economy to the brink, 49% of U.S. Latinos say they or someone in their household have taken a pay cut or lost a job. Given the dramatic growth in our U.S. Latino population, along with its economic force, our country can’t afford to overlook the needs of the population that will be vital to the future of our nation.
Prior to the downturn, the U.S. Latino market accounted for $2.3 trillion in GDP, reflected more than 80% of net new growth in our labor force, and comprised 86% of net new businesses in the last ten years. Additionally, our real consumption grew 72 percent faster than that of non-Latinos. Post-COVID-19, there is little doubt the future of the economic rebound and growth rests largely with Latinos and the businesses we own and operate.
The small business sector has been especially hard hit by the economic effects of the virus, with Latino business owners more susceptible to closures and job cuts. However, even with the Federal government stepping in with the Paycheck Protection Program (PPP) to support businesses, owners are still finding the application process cumbersome, tedious and difficult. The National Association of Real Estate Professionals (NAHREP), alongside the Latino Business Action Network and the Hispanic Chamber of Commerce have been hard at work advocating to fix some of the elements that have not been working with the PPP. We must ensure that Congress continues to replenish the funds and that the Small Business Administration improves its administration of the program and clarifies some of the confusion that has led to so many independent contractors being left without access to the funds.
Regardless of where Latin business owners are in the process, we’ve compiled a few key tips to make the application process as simple as possible.
- Use Your Network…¡Sin pena!
As Latinos, we’re known for our interpersonal skills and there’s no better time than now to tap into our network – especially business banking representatives – to see what options are available as an existing client. If you don’t have a banking representative, find the lender match tool on the SBA website for a list of the more than 4,500 SBA-approved lenders currently offering the PPP. Avoid using the SBA website to submit your application as you will find the Disaster Loan Assistance program (Economic Injury and Disaster Loan) there, not the PPP loan details. If you have questions, lean on your network, and ask away!
- Prepare, Prepare, Prepare
With the PPP application process being cumbersome to begin with, it’s even more critical that you prepare and have on-hand all necessary documentation before starting the application. Call your bank in advance to inquire about the type of background materials you’ll need (including 2019 tax returns). If you use an outside service for bookkeeping and payroll, the company will most likely already have the information you’ll need.
- Be Clear!
Make sure you clearly note on your loan application what exactly you will be using the PPP funds for. Acknowledging that the funds will be used to maintain payroll, make mortgage, lease or utility payments will increase your chances of loan forgiveness down the road. If you’re going to use the money for more than payroll, check the applicable boxes accordingly. Though these steps will be important when it comes time to determine loan forgiveness, a very low interest rate of 1% will apply for those who do not apply or qualify for loan forgiveness.
- Stay Organized
Once approved, organize your accounts to best track PPP money once it gets distributed. This will make it easier to break down the spending when it comes time for the forgiveness consideration. Open a new account just for your PPP funds with the same bank that is facilitating your PPP loan – keep it under the same roof! This will ensure all of the designated money is managed and documented properly and filed for when you need it at a later date.
- Be Patient and Don’t Give Up
Though the process can be long and tedious, it’s definitely worth the wait. Patience and organization are crucial to getting through this crisis. Your chances of receiving this loan are high especially with the approval of a second round of funds being allocated by the Federal government. Perseverance is key and it’s up to us to fight for our businesses’ success.
Gary Acosta is the Co-Founder & CEO of The National Association of Hispanic Real Estate Professionals (NAHREP) and Co-Founder of L’ATTITUDE, a mega-event that raises awareness of the key role Latinos play in America’s New Mainstream Economy. Acosta was named by REALTOR® Magazine as one of the 25 most influential people in real estate, and Hispanic Business Magazine named him one of the 100 Most Influential Hispanics in America.