As lawmakers debate how to pump more money into a high-profile pandemic-related small business loan program, a coalition of companies and real estate professionals have launched a new portal to help independent contractors such as real estate agents (among others) actually score some of the cash when it becomes available.
The portal is part of the website of Loan Source, a non-bank lenders that works with the U.S. Small Business Administration (SBA), which is overseeing the Paycheck Protection Program (PPP) during the economic crisis. Loan Source built the portal with consulting firm AQN Strategies, technology company iControl Data and technology engineer consortium CovidReserve.
Nurit Coombe, owner of Maryland’s RE/MAX Elite Services, also consulted on the project.
Joshua Kravitz, Loan Source’s chief operating officer, told Inman that the project came about after everyone involved realized that there was tremendous demand for PPP loans. However, there was also a significant amount of confusion over the program, especially regarding how exactly independent contractors who don’t have traditional payrolls could apply. Additionally, banks were tasked with distributing the money, but according to Kravitz they typically don’t have extensive experience with SBA loans because such loans are less profitable.
Loan Source — which has a long-standing relationship with the SBA — wanted to help solve those problems. But as a small family business, it needed to scale up in order to handle a flood of incoming applications. The partnership allowed Loan Source to do just that, beefing up its scale by relying on its partners’ software for things like verifying applicants’ information.
“Verification is a perfect vehicle to be automated,” Kravitz told Inman. “We have just taken out a significant bottle neck.”
The result is that Loan Source should now be able to process more PPP applications, at a faster pace, than was previously possible. The system isn’t exclusive to independent contractors, but has been designed to accommodate them as well as more conventional businesses.
The PPP first started accepting applications just over two weeks ago. The program was initially hailed as a lifesaver for small businesses; any firm with 500 or fewer employees was able to apply for up to 2.5 times its monthly payroll. If the company used most of that money to pay employees, the loan turned into a grant.
But perhaps thanks to its rapid rollout, the program also suffered from glitchy application systems, gaps in information and other problems. Real estate businesses ultimately scored about $10.7 billion, but many in the industry have complained that they never heard back about their applications and haven’t received money yet.
Further complicating matters, the $349 billion that Congress initially set aside for PPP loans ran out last week.
Lawmakers are currently debating how to inject more money into the program. They haven’t reached an agreement yet, but U.S. Treasury Secretary Steve Mnuchin said over the weekend that a deal should happen soon.
In the meantime, Coombe urged real estate professionals to apply for PPP loans now so that they’ll already be in line for the money when it does get approved (loans are granted on a first-come, first-served basis). In an email, she explained that “this is important and time is of the essence.”
Kravitz also said that would-be loan recipients are free to apply through multiple lenders. They can’t ultimately accept multiple loans, but he urged people to apply more than once so as to increase their odds that one application will actually be accepted.
“Everyone should go and seek the quickest form of capital,” he said. “People should apply to 10 places. When you fill out your borrower application you certify you will not accept two loans.”
What all of this means is that real estate professionals who have already applied but never heard back can still submit new applications, including via the system that Loan Source now has in place.
For more information or to apply for a loan, visit Loan Source’s website.