BlueVine 2020 Offerings: Attractive Business Loans
The coronavirus pandemic has created an economic crisis that quickly spread across the globe. The restaurant industry has been significantly impacted. As uncertainty lingers, restaurants have been forced to remake themselves to deal with strict limits on the number of customers they can serve.
Fortunately, DoorDash, a technology company that works with the restaurant industry, approached BlueVine Business Loans, a digital business loan platform, with a proposal to form a partnership to help restaurants access critical PPP loan funds.
Paycheck Protection Program (PPP)
The CARES Act authorized and funded several new programs for small businesses, including $659 billion in PPP loans. The paycheck protection program was created to help small business owners keep their workers on their payroll. Small businesses would be able to reopen quickly, and fewer Americans would be on unemployment.
- PPP loans are guaranteed by the SBA. They carry an interest rate of approximately 1% and have a two-year to a five-year loan term
- At least 60% of the loan funds must be used to cover expenses related to payroll and employee benefits
- The balance can be spent on other operating costs, such as utilities, rent, lease, or mortgage
- If these conditions are met, the loan is forgivable
Initially, applications could only be made through current SBA 7(a) lenders, other banks, and credit unions. Ultimately, alternative lenders, such as BlueVine, were authorized to process PPP loan applications.
The first round of funding was rapidly depleted, and the second round is currently closed. Congress is working on a coronavirus relief package to authorize additional funds to support another round of PPP loans.
In the meantime, the SBA EIDL and other debt-relief programs continue to offer financial relief to small businesses impacted by COVID-19.
Impact Of COVID-19 On Restaurant Industry
The coronavirus pandemic has touched every corner of the globe and impacted virtually every sector of the economy. Among the hardest hit are the retail and restaurant industries.
- The National Restaurant Association estimated that the industry has lost more than $25 billion in sales, and the pandemic isn’t over. According to an article in Law.Com, restaurants have lost almost three times more jobs than any other industry
- Even as restrictions have eased, most states require restaurants to limit their indoor seating capacity
- Restaurants have been forced to pivot to takeout and delivery-only operations
The first round of PPP funding evaporated quickly. SBA lenders gave preferential treatment to current customers and larger businesses. Restaurants and other smaller players in the market found themselves sidelined. Additionally, small restaurants found it nearly impossible to navigate the complicated application procedure for paycheck protection program loans.
Who Is DoorDash?
DoorDash is a technology company that facilitates door-to-door delivery. The mission is to connect people to the best cooks in their city. “Dashers” pick up orders from restaurants and deliver them to the consumer.
- Restaurants sign up to become DoorDash merchants
- The restaurant sends its menu to the delivery service, who puts it on the app
- Either DoorDash or the restaurant’s employees deliver the order
- It receives a commission on the takeout orders
BlueVine Business Loans Teams Up With DoorDash
DoorDash had first-hand knowledge of the difficulties their merchants were facing in accessing paycheck protection program loans. Most of the merchants they work with have less than ten employees. Many attempted to apply through their local banks and were unsuccessful.
DoorDash approached BlueVine to create a customized PPP application tool for its merchant partners. They chose to work with this loan platform because its technology enables quick loan application processing.
The partnership began in mid-April. As of the end of July 2000, its merchants had received more than $6 million in paycheck protection program funding.
How Does The BlueVine-DoorDash PPP Partnership Work?
The partnership’s goal is to help small restaurants (ten employees or less) access PPP funding. DoorDash merchants are notified via email or through the merchant portal about the partnership with BlueVine. They’re encouraged to apply through the loan platform directly.
BlueVine keeps the delivery service advised on how the application process is proceeding. Moreover, DoorDash is available to assist their merchants if needed.
To help speed up the application process, the platform’s business loan applications are processed using groundbreaking technologies such as optical character recognition. Data is scanned digitally, which efficiently shares essential information required for the loans.
BlueVine Business Loans
BlueVine is an online lending platform founded in 2013. It provides high-tech financial services for small businesses such as checking accounts, line of credit, invoice factoring, and loans. Since its founding, this platform has provided more than $6.5 billion in financing to small and medium-sized businesses. Moreover, it processes loan applications and originates loans. However, its funds come from two partnership banks.
BlueVine has originated more than $4 billion in PPP loans benefitting more than 125,000 small businesses.
The BlueVine and DoorDash partnership helped to level the playing field for small restaurants shut out from PPP loan funds. DoorDash is donating proceeds to support programs that provide financial support to restaurant employees. It also set up a relief fund for small businesses owned by women, immigrants, and people of color. BlueVine will process PPP business loan applications as soon as the next round of funding has been approved.