 Hi everyone, I'm Scott Shigeoka. I'm GoDaddy's Entrepreneur in Residence and I'm here at home sheltering in place. And for the next 15 minutes or so, I'm gonna be doing a round table with some experts about PPP or the Paycheck Protection Program. There's been some updates and we have some new questions that we wanna dig into. Like what's different about this round versus the first round and how should we approach lenders as small business owners to capitalize on this opportunity? And what are some barriers or challenges we might expect to small business owners? So to answer these questions, we're bringing back a group of experts to talk about this together with me. We have John Stanford from the Association for Enterprise Opportunity. We have Brian Peters from the Franklin Square Group and Ashley Heineman, who's GoDaddy's Director of Global Policy. And just before we begin, I wanted to disclaim that this isn't legal or financial advice. There's a lot of trusted news sources and authoritative websites where you can get information. And those things are actually gonna be below. But I'm hoping that this round table that we're doing is a great discussion that helps you as an entrepreneur and all of our community get through this COVID-19 crisis. Thanks again for joining me, everyone. I'm hoping we can start with a little reminder. What is the CARES Act and what specifically is the PPP? So the CARES Act is a $2 trillion stimulus program that consists of stimulus payments to individuals. Those are the stimulus checks or payments that everybody's getting. It's roughly a half trillion in small business loans that we'll talk a lot more about today. And then another half trillion for larger business loan programs administered by the Treasury Department and the Federal Reserve. And there were some recent policy changes to the PPP, right? So I think one of the most news worthy elements of PPP in the CARES Act was how speedily it ran out of funding. We knew that Congress would refill that program and that's what they did. And so by and large, PPP really didn't change in what we're calling CARES Act 2.0, but there were a couple slight changes. Most notably was the addition of two separate pools of money. As many folks saw, there were concerns that the initial batch of funding for PPP wasn't reaching the smallest or rural or minority business owners. And so one of the ways Congress tried to address this was by creating two additional pools of money. 30 billion was set aside for mid-sized lending institutions. Those with 10 to 50 billion on their books. And then 30 billion was set aside for institutions with less than 10 billion on your books. I think the jury and the data is certainly still out, but we do know just like the first time around, this money is and has moved quickly. Could you talk a little bit about the challenges and some of the frustrations that small businesses might be facing right now? There's just an overwhelming demand of interest in these loans, first of all. And the infrastructure just isn't set up in a way to handle it. If you look at where things were last year outside of this pandemic situation, you had just about as many applications for loans as you've seen in the last two days. So you really just have a system that's in place that's not capable of dealing for the type of volume that you're seeing in terms of interest in these loans. You had banking institutions having to constantly refresh just to get the loans of their clients processed and submitted to the SBA. Then there's also been issues in terms of getting updates with respect to what the status of the applications are. What happened in the last round basically is that a lot of applications went in and the money ran out for the program before they were able to be processed. So this has been really difficult in terms of a small business in particular who really wants to have some assurances that all this hard work is going to pay off. So with these changes with the PPP, do we think that the money will actually get to small businesses this time? Well, as John mentioned, they have designated two chunks, $30 billion for medium-sized banks and another $30 billion for small banks. I think one of the challenges is though that that is based on an assumption that medium-sized and small-sized banks mean small businesses. And that's not necessarily the case. You could have a very small community bank on the corner but they may ultimately distribute loans to large businesses in their community and not necessarily the barbershop or the coffee shop. All right, so one thing I keep hearing from small business owners is which lender do I go to? Do I go to a smaller bank? Do I go to a larger bank? What's your advice? I think it's kind of a knowledge tree or a decision tree of first, go to the bank who knows you already. If you have a bank who knows you, there are restrictions around know your customer rules and anti-montany laundering rules that will make getting you onboarded faster and simpler because the bank knows you. But my underlying recommendation is don't put all your eggs in one basket. You are only allowed one PPP for your business but it doesn't mean you're only allowed one PPP application. And so I would pursue these lines with wherever you can if you have the time and opportunity and wait to see which one confirms alone with the SBA first. There's nothing that's preventing you from then pulling back all the other applications and pursuing the one that actually went through. And I think the folks who try multiple ways to get these loans will probably be the ones at this late hour that have a semblance of success. So it sounds like the money for the second round is running out. Should we expect that there's future rounds coming soon? We're really not sure. We've heard from many of the key stakeholders through this process, whether that's folks in the Senate, folks at the Department of Treasury, folks at the SBA. Some have been very explicit that they don't see the PPP program having continued funding and that the $600 plus billion is sort of the end of the road. I think there are many more folks. There's certainly been a large advocacy effort to expand the program and to expand the time horizon of the program. And the last piece I'll say on this is many of the challenges that the program has that have already been spoken to are issues that we have known for a long time. And coronavirus isn't necessarily causing new divides about who is gonna recover fastest and resiliency. It's exposing what we've known to be true for decades. Capital access is a bigger challenge in certain places. Under banking and underserved areas is a challenge and we're only seeing it really come to a head during a crisis. And so I think we'll continue to need to explore what options are best for those communities. Could you talk a little bit about the PPP in particular and whether there was any racial disparities or racial inequity that was at play in regards to how the funding was distributed? If you look at this program like any other federal program, they do have language built in what they consider to be approaches to dealing with minorities, to dealing with tribal situations, to dealing with veterans. The right words are there, but at the end of the day, if you look at the data, the ones that end up profiting the most on these types of programs are the large businesses, the ones that are more tapped in. So I think having a complete overhaul of the system is probably something that's long overdue. Is there any evidence to show that this is making a difference for small business owners? I have not seen a lot of kind of anecdotes of companies out there that are jumping for joy that they receive their PPP loan, but who knows? I'm sure we'll start to see more evidence and more anecdotes as we see some of the better stories out there. I agree completely with Brian, but if you look at the numbers coming out of the SBA, there have been 1.66 million loans approved. So one has to assume that this money is getting to at least some hands that really need them. And if you look at what the SBA is saying, that this supports more than 30 million jobs. So that is promising if you take that at least at face value. On the PPP website, they say that June 30th is an important date. Can you talk about what happens on that date and what small business owners should know about it? The June 30th date is tied to the loan forgiveness element of the program, which is far and away the most attractive and interesting piece. Banks are very concerned about what is or I should say lenders more broadly are very concerned about moving forward on loan forgiveness without really clear guidance. And there are a lot of different elements of that. You touched on one, the idea that you need to have your head count back up by June 30th. We don't know what that really means besides what the law spelled out and it left a lot of things undefined. For example, we don't know the definition of a full-time equivalent employee and how many hours that should translate to. I think that's one question that business owners and lenders are really watching on. We will need to watch these loan forgiveness requirements very carefully. So right now we have a lot of small business owners who are really struggling to keep their doors open. You know, what's your advice for them? It's never been more important to belong to local, state, and national organizations. I think this is exposed that communication and knowledge really is power here in a sense. If you knew about PPP earlier, you maybe got into the program earlier, you had a better likelihood. So I think increased communication and awareness of these programs is critical. My sense is that one of the aspects of this program that has been particularly troubling for a lot of potential small business borrowers is just the paperwork requirements, what you have to show in the initial application process and what you will eventually have to show for the purposes of proving that you've maintained some amount of payroll. So I would recommend that people be organized as organized as they possibly can and try to have as much of that digitized and in some sort of a digital platform where you can readily access it. The funds may be running out quickly again, but I think for the next go around to John's point, we definitely would recommend that businesses be kind of plugged in, so to speak. And another thing that I just can't stress enough is just be ever vigilant of scams. Pay attention to what your emails look like that you receive and before you respond to anything, do take a breather, do some due diligence and make sure that what you're responding to, whoever you're giving your information to that you're giving it to the people you think you are. I'm noticing that a lot of small business owners are taking this time to be really creative and to really innovate their businesses. What have you been noticing? It's been really interesting to sit back and watch how small companies and businesses in particular have really taken advantage of this opportunity because they're forced to retool themselves, to reinvent themselves. And that's been really exciting to watch and I'm curious to see how this all plays out at the end of the day. We have seen 10 years of digital growth in 10 weeks and I think that's gonna be one of the stories that is so fascinating. It has been a game changer for the businesses that found a way to get online. I was talking with a doctor's office today who never had any intention to get into telemedicine and telehealth and now is seeing patients virtually and has revamped their website in order to be helpful to patients. I think that may be one of the underlying stories when all of this has passed, we will have seen a transformation of our economy and an acceleration of what it means to be a digitally fronted business. It was really great to talk to you all. Thanks so much for your time, for your wisdom, for your energy. And I hope you stay safe and well during this time. I hope you found some value from this round table today. I know that the PPP is constantly changing and there's so much unknown and a lot of information and I am sure that some of you still have questions. So I encourage you to leave comments below and if you need some resources or more information, you can go to openwestand.org and subscribe to this channel to keep up to date. And until next time, I hope you stay safe and well.