Sponsored By Cross River Bank
A comprehensive report released earlier this month by a California-based think tank sharply criticizes and condemns the federal government’s overall response to providing security and resources to millions of minority and women-owned small business enterprises (MWBE’s).
The Pacific Research Institute (PRI) based in Sacramento published and released the report entitled, “Promoting Economic Recovery Through Entrepreneurship Not Government,” that, among other things, analyzed the impact of the federal government’s COVID-19 relief efforts on small businesses. The report highlights how some federal government programs implemented to help small businesses deal with the pandemic were subpar and modestly beneficial at best. Wayne Winegarden, a senior fellow in business at PRI and a pivotal contributor to the study, said overreaches by the federal government in many of its actions during the height of the pandemic hurt small business owners. More than 100,000 small businesses closed due to the pandemic, with a disproportionate number being M/WBE’s.
According to various reports, the federal government issued at least 215 new COVID-19 related regulations, some of which increased regulatory burdens on small business owners. For example, the national eviction moratorium directly impacts small businesses that own apartment buildings, own rental homes, or run a business from their residence. “Its actions become detrimental to prosperity,” Winegarden said. “Instead of hoping that an expanded federal bureaucracy will increase entrepreneurial innovation, policymakers should empower individuals by reducing barriers to entrepreneurship.”
.In New Jersey, some banks stepped up to the challenge and managed to navigate the lugubrious process implemented by government mandates related to COVID-19—most notably the Paycheck Protection Program (PPP). For example, Fort Lee-based Cross River Bank—a mid-sized community bank outpaced its competitors—including some bigger banks and stepped up and focused funding initiatives to small businesses.
Cross River originates loans from more than a dozen or so venture capital-backed financial technology startups. Some contend it was Cross River Bank’s savvy lending practices and marketing strategies that gave stellar rise to the term “fintech.” In its broadest definition, a fintech isn’t a person, per se, but downloaded apps. Fintechs provide the customers via apps, and Cross River delivers the licenses and some other basics. The bank holds a modest stake—about 15% of each loan it issues. “We were the second largest PPP lender,” said Eden Hoffman, director of communications for Cross River. Other big lenders in the PPP included JP Morgan Chase and Capital One. With assets of about $9.9 billion, Cross River Bank continues to make inroads in the financial services and tech industries.
Earlier this month, it acquired Betterfin—a financial platform that enables small business owners to access financial products and services and manage lending and cash flow processes. Among other things, the move will simplify and expedite the traditional Small Business Administration (SBA) loan process by digitizing the process and providing a technology-focused platform.
“With the addition of Betterfin ts technology, stack and market intelligence, the combination of our core infrastructure and small business offering will become another powerful tool of our growth engine,” said Gilles Gade, president, and CEO of Cross River.
(In part 3 of the series, NJURBAN NEWS will highlight the PPP loan forgiveness process)