Opinion: Public-private partnerships will lead recovery
It took nearly a decade for Michigan’s small businesses to fully recover from the Great Recession of 2008-09. I’m optimistic these vital businesses will bounce back much quicker this time, thanks in large part to the indisputable success of the Paycheck Protection Program.
To date, the state’s small business sector has received more than $16.5 billion in emergency capital through the PPP. The forgivable loan program, which helps small businesses cover two months of payroll and other fixed expenses, helped stabilize more than 114,000 Michigan businesses that have been hammered by lockdowns and necessary social distancing requirements.
Since its April 3 launch, the PPP has provided an economic lifeline to small businesses in the state’s most important sectors, including:
► Manufacturing: 7,469 loans worth more than $3 billion
► Construction: 9,420 loans worth more than $1.7 billion
► Tourism: 2,203 loans worth more than $168 million
► Agriculture: 2,449 loans worth more than $209 million
Michigan’s rural businesses received $4 billion in PPP loans. Only Texas — a state with a population nearly three times that of Michigan — received more PPP funding for rural businesses.
When President Trump announced the PPP, he pledged it would be administered with an extraordinary sense of urgency. Since then, the Trump administration has worked around the clock to deliver on that promise.
The SBA launched the PPP in just seven days despite unprecedented federal workforce challenges created by the pandemic. Since then, the SBA and Treasury have addressed a litany of regulatory, legal and technical challenges needed to keep the program stable while processing an unprecedented amount of loan volume at record speed.
In the first 14 days of the program more than 43,000 Michigan small businesses were approved for loans totaling $10.4 billion. These loans supported or saved an estimated 900,000 Michigan jobs.
In the 11 days that transpired between the time Round I funding had been exhausted, and the time Congress replenished the fund, the administration took important steps to ensure that PPP funds would be available to socially and economically disadvantaged businesses, of which many do not have longstanding financial relationships with banks and credit unions.
Since April 27 — the day Round II of the program began — SBA has approved a half-million PPP loans worth more than $30 billion submitted by lending institutions specializing in connecting underserved communities with capital.
In the coming weeks and months, as lockdown orders are relaxed and Michigan’s economy begins to return to normalcy, the SBA will be laser-focused on ensuring the unique needs of minority small business owners are fully understood, that SBA policies are responsive to those needs, and that progress in underserved communities like Detroit, Flint and Saginaw is being tracked.
A newly formed SBA task force will leverage public-private partnerships, including non-profit Community Development Financial Institutions (CDFIs), Community Development Corporations (CDCs), and Minority Depository Institutions (MDIs) to meet the recovery needs of minority-owned small businesses.
Earlier this month, the SBA worked with Goldman Sachs and Community Reinvestment Fund, USA, a national CDFI, to provide more than $15 million to minority businesses in the City of Detroit, home to one of the largest concentrations of black-owned businesses and black women-owned businesses in the country. Public-private partnerships such as this are critically important to accelerating small business recovery and supporting upward mobility.
I’m confident Michigan will once again earn its title as the comeback state, thanks to the president’s leadership, the efforts of the Treasury secretary, the dedicated efforts of the men and women of the SBA, and a growing number of public-private partnerships.
Jovita Carranza is the administrator of the U.S. Small Business Administration.