- Case study
Helping to deliver fast and direct economic relief to small businesses in crisis
With the US CARES Act, a lifeline of working capital powers Main Street during Coronavirus
Multiple leading companies in the banking, consumer goods, and healthcare industries, including:
Cash. It's a company's lifeblood. If it dries up, so too does its ability to fund operations, make payments to employees and suppliers, and reinvest in the business. Yet for hundreds of thousands of small businesses in the US, this is exactly what happened in the spring of 2020 when the world faced the global COVID-19 pandemic.
Coronavirus dealt a heavy blow to small businesses in the US. At least 46 states shut down non-essential businesses to slow the virus' spread, forcing many to lay off staff and watch their revenues plummet to zero. As part of the supply chain for essential businesses and multinational corporations, shuttering their doors also put the economy at risk.
In response, the US government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The centerpiece of this legislation, the Paycheck Protection Program (PPP), helps small businesses continue to pay employees during the crisis. To execute it, the government asked banks to rapidly funnel more than $650 billion in stimulus money to small businesses in the form of forgivable loans administered through the Small Business Administration (SBA). The objective? To save the economy from collapsing under the weight of a global pandemic.
A dash for cash overwhelms lenders
Immediately, participating banks saw a spike in loan-application volumes, which caused administrative backlogs. Even before CARES, banks were experiencing a surge in commercial credit applications because of low interest rates. Now, in a matter of days, they needed to update and scale their operations – including people, processes, and technology – to accommodate the act.
Banks had to implement substantial adjustments to the terms, conditions, and eligibility requirements of the SBA loan program. They needed to quickly train or engage operators to execute new verification, documentation, and monitoring procedures, and reconfigure small-business-loan platforms with speed and efficiency. And because banks needed to approve loans much faster than usual, the potential for operational and fraud risk increased, requiring them to augment their know-your-customer and financial crimes capabilities.
Small-business owners facing fear and frustration
Meanwhile, with SBA guidelines for financial relief evolving daily, small-business owners struggled to keep up with the latest eligibility and filing regulations. They were confused about the terms of the loan and whether it made sense for their businesses to accept the money at all.
In some cases, the systems their banks used for uploading documents weren't working. They worried the money would run out before their applications were processed. And with banks overwhelmed, it was difficult to get help from a customer-service representative.
Some of the hardest-hit small businesses were restaurants, healthcare and educational facilities, lodging establishments, supermarkets, and pharmacies – the customers of consumer-goods companies.
Small businesses needed help. The large, consumer-goods and healthcare companies that rely on them as customers needed help. Banks needed help. Genpact stepped in.
Processing loan and forbearance applications at speed and scale
For one of our banking clients, we used robotic process automation (RPA) to speed up the mortgage forbearance programs it offered as a result of the CARES Act.
For another banking client, we developed agile processes and proactively identified associated risks and controls to mitigate any regulatory and compliance issues associated with SBA loan applications.
Both banks, staffed for much lower volumes of loan applications from small businesses, also needed more capacity to quickly process PPP applications. Genpact provided the people and banking expertise to scale their operations and help them with the surge.
Helping small business owners with the loan application process
Our deep banking experience meant we could help our clients in other industries as well.
We worked with both a Fortune 50 healthcare company and a global food-service leader to set up and staff CARES Act support centers for their US small-business customers and help them sift through the financial relief guidelines and answer questions related to eligibility and filing.
Genpact helped multinational companies and banks answer the call to support their small-business customers in their time of need. The most impressive results can be found in the words of our clients, who had this to say:
Aid is only useful if it reaches those who need it. And at a time when business was anything but usual, Genpact's work helped those companies who needed it most.