Some readers have been stymied in their attempts to apply for a PPP (Payroll Protection Program) loan, a special SBA product that is up to 100% forgivable (depending on how it is used), so I reached out to Kabbage, a small business-oriented fintech, and they provided me with a unique link for readers to apply for the remaining funds. And, indeed, there are remaining funds–and time to apply, which is potentially very good news. Note that Kabbage can only process loans of up to $2 million. Please note that I myself am not a financial professional and am neither licensed nor equipped in this area; the information and opinions below are those of Mr. Frohwein and Kabbage.
Rob Frohwein, CEO of Kabbage, explains, and extends this invitation: “There is still over $140 billion left in PPP funding, and we’re accepting applications for eligible small businesses, whether sole proprietors, partnerships, corporations, or non-profits. The application is completely online and more than 75% of all applicants have a fully-automated experience, meaning the system helps walk you through each step from applying to receiving funds into your account. For most eligible businesses, we are able to receive SBA approval in less than 24 hours.” Here’s the application link.
While I had him, I asked Frohwein share more about what Kabbage has been doing to help small- and mid-sized businesses.
Rob Frohwein, Founder & CEO, Kabbage, on the Money Stage in the RDS, Dublin, Ireland. Picture … [+]
Rob Frohwein, CEO, Kabbage: Kabbage was founded [in 2008] during the height of that financial crisis as we realized America’s small businesses needed financial services and products built and designed specifically for them. We got our start in providing access to working capital and have since expanded in offering online gift-certificate services, payment acceptance and cash-flow insights products, with more solutions forthcoming.
Micah Solomon, Senior Contributor, Forbes, Customer Experience Consultant: And this gap was still gaping, in spite of all the banking institutions clamoring for other kinds of business?
Frohwein: Small businesses have always been underserved by traditional financial institutions. We focus on America’s smallest business, 80% of which have 10 or fewer employees. These businesses are the backbone of our economy as they represent more than 50% of our non-farm GDP, yet they often are unable to access basic financial products, especially funding. Our technology platform leverages data and automation to help Main Street businesses identify cash-flow challenges in their business and access the products to resolve them.
Solomon: What have you been doing specifically to help in the current economic crisis?
Frohwein: As soon as shelter-in-place orders were issued and we saw small businesses closing their doors across the country, Kabbage built and launched www.helpsmallbusiness.com in three days. It’s a free product and allows small businesses to generate much-needed revenue through the sale of online gift certificates.
Kabbage was also the first FinTech to accept and fund PPP applications. Through our efforts, we’re proud to now be the fourth largest PPP provider in the nation with more than 130,000 approved applications for over $3.9 billion. We are focused on serving America’s smallest businesses, many of whom continue to have difficulty applying through their bank. More than 90% of our approved applications are from new customers, 80% of approved businesses have 5 or fewer employees and our average loan size is $30,000 compared to SBA’s total average of $113,000 for the second tranche of PPP funding.
Solomon: Once our readers get their PPP loan, what should they know about getting loan forgiveness?
Frohwein: In regards to forgiveness, small businesses should know there is no rush to apply. As the SBA continues to issue guidance for this, it behooves businesses to wait until details are final before submitting a forgiveness application. Unlike applying for the loan, there is not a ‘first-come-first-served’ urgency. Small businesses should keep a detailed record of how their PPP funds were used in the meantime but know they do not need to apply immediately.
Solomon: Any more general “downturn management” advice you’d like to share?
Frohwein: Be nimble and be focused. Unfortunately, small businesses have been impacted by the crisis at a greater proportion than any other type of business. As a result, Kabbage has had to move quickly to make sure we (a) take care of our customers, and (b) ensure that we are able to make it through the crisis healthy. If you run a small business, you need to be more creative than ever to identify ways to respond to the crisis with products and services that are important to your customers. How you approached your business before the crisis may no longer be relevant in our “new normal.” In addition to working smarter, you must work harder. You must outwork your competitors and gain a competitive edge. However, harder and smarter isn’t sustainable forever so make sure you execute well and then give yourself some much-needed rest.
Solomon: Will our country’s small businesses, which have been hurting so badly, ever come back? If so, when?
Frohwein: In terms of small business, I believe we’ll see a great resurgence in the coming year. With unemployment rates at an all-time high in the last 90 years, many individuals will start thinking creatively about how to earn an income for themselves and their families. I can’t wait to see the burst of creativity that is to come. The entrepreneurial spirit in this country will come back bigger and bolder than ever.