Miami-based Benworth Capital is seeking investors for an investment vehicle that will aid small businesses seeking Paycheck Protection Program loans.
As a U.S. Small Business Administration-approved lender, Benworth is authorized to accept and process applications for the program, which provides forgivable loans to businesses experiencing financial losses due to the Covid-19 pandemic. Benworth founder Bernie Navarro said the goal is raise up to $50 million from local investors to fund loans for Miami-area small businesses.
“Many small businesses have been shut out by banks, either because those institutions are overwhelmed or because of changing guidelines,” Navarro said. “That’s a gap we want to fill.”
Navarro aims to do that through “We Will Rebuild 2.0,” a private equity investment fund managed by Benworth Capital. Benworth, a private real estate lender, is seeking investors who can make a minimum contribution of $250,000 to the fund. In return, the investors will receive a share of the fee the SBA will award lenders for processing PPP loans.
Unlike banks, which fund loans through deposit customers, private lenders like Benworth fund loans with capital collected from investors.
The name of the investment fund is inspired by “We Will Rebuild,” a citizens task force lead by former Miami Herald president and CEO Alvah H. Chapman after Hurricane Andrew in 1992. The task force directed recovery efforts after the storm, which ravaged Miami-Dade County.
Navarro said “We Will Rebuild 2.0” will mirror that recovery effort by directing much-needed funds to truly small businesses unable to operate due to Covid-19.
“We need to make certain that the entrepreneurs and micro small businesses are not left behind,” he said. “If a business does not have a strong tie to a bank, nor a credit facility to meet a bank-imposed qualification criterion, they should not be penalized.”
Businesses can submit a PPP application to Benworth through SBABizHelp.com or SBAAyuda.com. Navarro said Benworth is already processing applications and submitting them to the SBA for approval. Once approved, the loans will be funded by the “We Will Rebuild 2.0” fund.
“We’ve had applications for loans as small as $7,500,” said Navarro, adding that Benworth will fund a maximum loan of $350,000.
Florida businesses were approved for 88,997 loans totaling $17.8 billion before the first round of PPP funding ran dry on April 16. The SBA began accepting applications for a second, $310 billion round of the program on Monday morning.
Article by Ashley Portero