Partnership Connects Pittsburgh’s Small Businesses to Paycheck Protection Program Funds
In response to COVID-19, the United States passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in late March. Part of the act includes relief for small business owners and their employees through the Paycheck Protection Program (PPP), a US Small Business Administration (SBA) program supported by the US Treasury. As the CARES Act and PPP were put into action, many local organizations formed partnerships with financial institutions to coordinate resources and support to get funds to the businesses and nonprofits that might have the most difficult time applying for and accessing them. In Pittsburgh, one successful partnership formed between the First Commonwealth Bank and Neighborhood Allies, a nonprofit focused on community development.
Neighborhood Allies is best described as a convener, intermediary, and trusted partner organization that acts as a catalyst for change in lower-income neighborhoods in Pittsburgh. Although the agency raises capital for investing in Pittsburgh neighborhoods, it is not a direct small business lender. However, Neighborhood Allies recognized that the COVID-19 impact would be devastating to its underserved communities, including the nonprofits and small businesses within them. To curtail this shock, the agency relied on its partnership with First Commonwealth Bank and helped more than 20 organizations complete applications to ensure the nonprofits and businesses did not miss out on PPP benefits.
First Commonwealth Bank agreed to give PPP priority to those nonprofits and small businesses referred by Neighborhood Allies, an action that was critical in ensuring that many of Pittsburgh’s most vulnerable areas were better positioned to benefit from the program. What may have begun as a small collaboration turned into an effective solution for responding quickly during a crisis and ensuring ongoing local needs are met. During the first round of the PPP funding, Neighborhood Allies was able to
- Help 16 small businesses and nonprofits secure forgivable PPP loans totaling nearly $1.3 million, with an average loan amount of $77,500 per organization, and
- Help retain or rehire more than 100 employees—an average of 7.7 employees per business.
Sixty-nine percent of the approved applicants were minority- and/or women-led nonprofits and small businesses, a remarkable number given that navigating the PPP loan process and accessing PPP loans has been challenging for many small businesses, but especially for minority-owned businesses, which have been among the hardest hit by the pandemic. “Many minority-owned firms have experienced problems accessing capital because they lack relationships with SBA-approved lenders,” noted Senator Marco Rubio, Chair of the Senate Committee on Small Business and Entrepreneurship during a recent Senate hearing.1 With help the Neighborhood Allies, nonprofits and businesses were able to build the relationships necessary for securing essential PPP dollars.
The success of the Neighborhood Allies–First Commonwealth Bank partnership shows the importance of local partnerships when responding to COVID-19. Built on trust, communication, and an interest in community success, partnerships are essential for local responsiveness—especially during a crisis. As Pittsburgh and the rest of the world continue work to alleviate the health and economic impacts of COVID-19, these local partnerships play an important role in leading change—and success—in our communities.
- The CARES Act
- COVID-19 Relief Pennsylvania Statewide Small Business Assistance
- Special COVID-19 Edition: Small Business Access to the Paycheck Protection Program
- Federal Reserve Bank of Cleveland Responding to Coronavirus Disease (COVID-19)
- The Fed's Paycheck Protection Program Liquidity Facility, explained
- Neighborhood Allies and First Commonwealth Bank Partnership Provides $1.3 Million Through Paycheck Protection Program To Vulnerable and Minority-led Businesses
- US Small Business Administration Paycheck Protection Program
- Rubio, Marco. “Capital Access for Minority Small Businesses: COVID-19 Resources for an Equitable and Sustainable Recovery.” July 23, 2020. Return