As the global economy continues to struggle during the COVID-19 pandemic, the U.S. government has pledged $284 billion in loans under the Paycheck Protection Program (PPP) to help small businesses cover payroll and benefits for out-of-work employees, as well as other costs. This is the third tranche offered to small businesses through the PPP, and the first since last April, for a total of relief funding exceeding $900 billion.
The money is desperately needed. Approximately 3 million small businesses closed in 2020 due to COVID. Nearly half (49%) of small businesses were unprofitable in 2020, and 68% reported laying off employees or reducing hours/pay, according to a survey by the Small Business Administration’s (SBA) non-profit SCORE association.
Small businesses are the lifeblood of the U.S. economy, representing nearly 70% of U.S. jobs. They drive innovation and competitiveness and employ nearly half of all Americans. Without healthy and thriving small businesses, our economy would collapse.
Unfortunately, however well-intentioned, the two previous rounds of PPP loans were undermined by bureaucratic mismanagement and poor communication. There was no outreach to many small businesses that qualified for PPP funds, while larger organizations were granted loans.
To facilitate the rapid and accurate allocation of PPP loans to the small businesses who need it most, lenders must understand and avoid the problems that plagued the PPP program last year. Those include lack of proactive constituent outreach, information silos, and inconsistent processes. Many small businesses never knew if they were eligible. Others simply had no idea how they could apply for access to PPP funds. Confusion reigned for small businesses and lenders.
There’s too much at stake for those mistakes to be repeated. Lenders must effectively address four distinct challenges in administering PPP loans if they are to provide the assistance small businesses and our economy need.
The first challenge is lead generation – the ability to identify and reach out to qualifying businesses. For example, roughly 95% of Black-owned small businesses and 91% of Latino-owned small businesses had virtually no chance of receiving PPP loans earlier because they lacked relationships with lenders. Lead generation is important because it allows lenders to collect information that can be used to speed the loan process. If a small business requests a loan, the lender knows exactly how much the company is eligible to borrow.
Application submission and application review are the second and third challenges. Small businesses need to know where and how to submit their applications. Once filed, prospective borrowers need to know the status of their applications so they can make business plans or submit further documentation if necessary. Failure to clearly communicate application requirements and status can result in small businesses running out of money and shutting down.
Meeting the responsibility to notify borrowers whether they have been granted a loan – and if so, how the funds can be obtained – is the fourth challenge facing lenders.
It’s clear that active engagement and follow-up between lenders and borrowers are critical to the success of programs such as PPP. To ensure a better borrower experience for small businesses seeking emergency loans, new technology solutions are needed to improve communications and streamline the process.
One such solution is a modern contact center that enables proactive outreach, provides omnichannel communication options, and makes information easily accessible to borrowers, loan officers, and customer service agents.
By deploying a secure, scalable, and dedicated cloud-based contact center platform that leverages automation and artificial intelligence (AI), lenders can deliver a more synchronized and efficient process through superior borrower engagement. A contact center with these capabilities allows lenders to categorize, prioritize and notify PPP applications faster, resulting in quicker turnarounds and loan distribution. The entire process becomes more efficient. Getting the money in the hands of small business owners faster, so they can pay their employees, purchase needed personal protective equipment (PPE), and invest in their business, is key to pivot in this new digital economy.
For example, proactively offering transparency regarding loan status to applicants spares them from having to call in and lenders from dealing with a flood of borrower calls. And a contact center with an AI-powered, self-service knowledge base empowers loan applicants to independently find answers to their questions and helps agents deliver the right information the first time.
Omnichannel communication streamlines the lending process by providing integrated proactive communications across phone, email, messaging apps, chat, and social media, all based on the borrower’s preferences. Multiple communications options permit lenders to easily engage applicants and prevent messages from falling through the cracks, which increase the efficiency of the overall process while reducing support costs. Leveraging voice biometrics and interactive voice response (IVR) lets small business owners be authenticated and securely access their accounts to determine their loan status through a natural language bot.
Lenders also need a dedicated contact center that can be deployed quickly to handle heavy volume. A cloud-based platform offers the necessary speed of deployment along with essential security, especially for remote agents and bank employees.
Getting the economy moving again requires the financial support of small businesses as they struggle to get back on their feet and develop new operating strategies for the post-pandemic era. If we give lenders the right tools to make the loan process simpler and more efficient, our small businesses will take care of the rest.
Cory Haynes, Vice President of Industry Strategy, Financial Services & Insurance, for Talkdesk