America relies on the small businesses that line the streets in all of its communities. More than 99% of the businesses in the United States employ fewer than 500 people, and historically, these small firms have created two-thirds of America’s net new jobs.footnote1 For these businesses and the communities they call home, navigating the impacts of the coronavirus continues to be critical to their future, as well as paramount to the nation’s recovery. The federal Paycheck Protection Program (PPP) was created to help, providing up to $813.5 billion in loans to small businesses across the country so they could continue to pay their employees and certain operating expenses.
Bank of America was the first major bank to accept PPP applications in April 2020, and has since delivered 475,000+ PPP loans — totaling nearly $34.5 billion in funding. Importantly, more than 99% of those loans have gone to companies with fewer than 100 employees. Nearly a quarter of the applications were from companies from low-to-moderate income neighborhoods.
“We knew that behind each application was a business owner seeking financial relief,” says Dean Athanasia, President of Consumer and Small Business, Bank of America. “We feel a deep sense of responsibility to assist small businesses of all sizes secure vital funding.” The company’s commitment is ongoing as it continues to support clients through the PPP loan forgiveness process. Additionally, Bank of America announced net proceeds related to PPP fees will be dedicated to support small businesses and the communities and nonprofits it serves.
How the funding has helped
Because of these loans, many businesses that have served their communities for decades have been able to keep their employees on the payroll — or bring them back if they’d been furloughed. One large medical group in Florida, for example, was able to keep paychecks flowing without interruption to its staff of more than 100 employees, while a 51-year-old New England HVAC engineering firm rehired its furloughed workers the very next day after their loan came through.
For many small business owners, their businesses are as much emotional investments as financial ones. The second-generation owner of a family-run furniture store on the West Coast, for example, reported that her PPP loan means that she can continue to honor her father by keeping the lights on, while at the same time saving the company for her daughter.
In 2020, Bank of America also deployed more than $250 million in capital to Community Deposit Financial Institutions (CDFIs) to fund Paycheck Protection Program loans that the CDFIs are making as Small Business Association lenders. Additionally, the bank made $10 million in direct philanthropic grants to CDFIs. These small, local financial institutions have a mission of serving low- and moderate-income communities, and are critical to expanding access to capital for small businesses impacted by the coronavirus.
Small business support is a critical component of Bank of America’s efforts to help local communities address a variety of issues stemming from or exacerbated by the coronavirus. The bank’s 5-year, $1.25 billion commitment to advance racial equality and economic opportunity focuses on developing career pathways, increasing access to healthcare, providing professional training, opening the door to higher education, and more in vulnerable communities around the country. Taken together, such efforts reflect a deep understanding that the sustainability of local communities is directly tied to the health of the country as a whole.