PITTSFIELD — The application period for the second round of Paycheck Protection Program funding opened Monday, but as of now only one Berkshire financial institution is eligible to assist those in need.
Greylock Federal Credit Union was able to begin receiving first draw PPP applications Monday, and second draw applications Wednesday because it is the Berkshire’s only certified Community Development Financial Institution, according to the U.S. Small Business Administration.
Greylock’s online application portal opened Monday afternoon, according to Jodi Rathbun-Briggs, the credit union’s senior vice president. Priority is being given to businesses owned by minorities, women, veterans and other underserved members of the community, as well as existing Greylock business members.
The certification is a designation given by the CDFI Fund to specialized organizations that provide financial services in low-income communities and to people who lack access to financing. The federal government is only allowing specially designated community lenders like Greylock that focus on underserved communities to begin processing PPP loans now because those groups either had trouble receiving funding or missed out on it entirely during the first two sections of the program’s first round last year.
“They were eligible in the first round,” Rathbun-Briggs said. “But I think the information about their eligibility didn’t get to them in a timely fashion. By the time some borrowers found out they were eligible the money was already used up.”
Initially authorized under the CARES Act, the PPP offers small businesses forgivable loans to help them both keep and pay employees. The first round closed in August after distributing $523 billion to more than 5 million businesses. Congress approved an additional $284 billion through March 31 for a second round of PPP loan funding in last month’s stimulus bill.
“I think under the CARES Act they were operating very, very quickly with limited information,” Rathbun-Briggs said. “When they opened the PPP round in the summer it was better and they had a few days blocked off to allow for smaller applications to come through, but I think Congress and the Trump Administration heard loud and clear that they had to create more access.”
Updated PPP guidance outlining program changes to enhance its effectiveness and accessibility was released Jan. 6, in accordance with the Economic Aid to Hard Hit Small Businesses, NonProfits, and Venues Act. Lenders classified as Minority Depository Institutions were also eligible to begin receiving PPP loan applications Monday. But there are no such institutions in Berkshire County, and only two are located in the state of Massachusetts — one in Arlington, the other in Boston, according to the Federal Deposit Insurance Corporation.
As of Monday, the government had yet to set a timetable for when larger banks and lenders can begin processing the second round of PPP loans. On Friday, the SBA stated that decision will happen “shortly.”
“Greylock’s focus on community development and our designation as a CDFI create a unique obligation for us to enable access to the PPP program as rapidly as possible,” Rathbun-Briggs said.