FOR IMMEDIATE RELEASE
Erin Musgrave | email@example.com | (530) 864-7014
Beneficial State Bank, a mission-aligned community bank serving Oregon, Washington and California, has outperformed other community banks of its size in distributing PPP loans, with large numbers going to women, people of color and nonprofits; calls for more and better support from Congress to help workers and businesses as they struggle through the pandemic and economic turmoil
Oakland, CA., July 31, 2020--Beneficial State Bank has made nearly $200 million in Paycheck Protection Program loans to small businesses across the country, supporting over 18,000 small business employees and outperforming banks with a similar asset size.
Beneficial State Bank has made over 1,300 loans to small businesses, the vast majority of which have fewer than 10 employees. Of the businesses that received loans, 35% were nonprofits, 21% were women-owned and 14% were owned by people of color.
Beneficial State has made nearly $200 million in PPP loans to date. According to June 30 data provided by the Small Business Administration, peer banks (assets between $1 billion-$5 billion) have made an average of about $130 million in PPP loans. Beneficial State’s average PPP loan size is $147,000 and 78% of the PPP loans they originated are for amounts under $150,000.
“The bank has been working overtime to get small businesses the help they need to survive throughout the pandemic, but the crisis is far from over and we continue to see a desperate and unmet need that Congress must address,” said Randell Leach, CEO of Beneficial State Bank. “There clearly needs to be another relief package, with better rollout, to help small businesses and workers persevere. Without it we’ll continue to see the closure of one small business after another, along with greater economic harm to workers and the unemployed, despite the herculean effort of all those involved.”
It is essential lawmakers pass another relief package as soon as possible, but the programs it creates must significantly lower the administrative burden for businesses and have more predictable program features and requirements. About $130 billion remains in the PPP fund but demand has slowed to a trickle because the current structure of the program doesn’t work for many small firms--particularly those owned by women and people of color.
“We did a substantial amount of PPP lending that we are proud of, but it gave us a first-hand view of how poorly constructed and administered the program was. The PPP’s flaws meant that many micro-businesses and those owned by women and people of color had to overcome enormous challenges to access and qualify, and many didn’t. What’s more, the uncertainty around the program limited our ability to get money to small businesses in time to make a difference,” Leach said. “Small businesses not only need more relief, but they need better relief. Any additional programs need a better rollout and specific language about how they will target the most vulnerable businesses, especially those operated by women and people of color.”
Beneficial State is calling on Congress to: extend and increase unemployment benefits; sustain economic impact payments (e.g. stimulus checks) to citizens during the pandemic; ensure remaining PPP dollars are available for the smallest businesses that either haven’t received a PPP loan or can demonstrate they need a second one to survive--but substantially revamp the administration of the program to ease the entire delivery and eligibility process in favor of smaller and underserved businesses; immediately and automatically forgive PPP loans of $500,000 or less, which will eliminate the onerous forgiveness process for small businesses struggling to survive and allow them to focus on running their businesses; and allocate $2 billion to the Treasury Department’s Community Development Financial Institution (CDFI) Fund, as CDFIs have a better reach than traditional banks into underserved communities and can better help the most vulnerable businesses (this can be funded by re-allocating unused PPP funding).
“We’ve listened to the heartbreaking stories of one small business owner after another trying to navigate the obstacles of the pandemic, and it is clear that even the businesses that did receive a PPP loan are still struggling because of decreased demand and the necessary extension of shelter-in-place orders,” Leach said. “Without additional, targeted help, our communities and businesses will suffer additional irreparable harm.”
As a federally certified Community Development Financial Institution and certified B Corporation, Beneficial State provides under-resourced communities fair and transparent banking services.
To speak to Randell Leach or other Beneficial State Bank representatives, contact Erin Musgrave at firstname.lastname@example.org or (530) 864-7014.
About Beneficial State Bank Mission-driven Beneficial State Bank is a state-chartered, federally insured Community Development Financial Institution (CDFI) and a “Best Overall” Certified B Corporation® since 2013. Headquartered in Oakland, California, and founded as a social enterprise bank in 2007, Beneficial State Bank has grown organically and through aligned acquisition to serve the three West Coast states. Beneficial State Bank holds to a triple-bottom-line of social justice, environmental well-being, and economic sustainability. Over 75% of commercial loans outstanding support affordable housing, renewable energy and environmental sustainability, education, and youth development, and other mission-aligned business structures and ventures. The Bank has no individual shareholders demanding that the Bank maximize profits in their interest. Rather, 100% of the economic rights of Beneficial State Bank are owned by nonprofit organizations. Beneficial State Foundation, the majority beneficial owner, measures and supports the social and environmental impact of the Bank and works to change the banking system for good.