At least some small businesses have begun receiving funds under an ambitious Trump administration effort to blunt the coronavirus pandemic’s economic fallout, though lenders continued to report technical glitches and mom-and-pop firms complained they still couldn’t get loans.
The launch of the
The clock is ticking for millions of business people who have been forced to close under shutdown orders and face laying off employees and possibly going under in a matter of weeks or even days.
Despite the problems,
“Yes, we have money flowing,” Howell said in an interview, adding that the bank would soon be able to automate much of the process. “I have customers call me in tears thanking me when they’ve received the money.”
The SBA’s coronavirus loan program got off to a rocky start Friday. Lenders
The SBA’s Paycheck Protection Program is part of the $2 trillion
The Treasury Department
Still, some small business owners did get money in their accounts the very first day. Tanya Weinreis, who co-owns the Mountain Mudd Espresso coffee business in Billings, Montana, along with her husband, got news about her SBA loan approval at noon on Friday.
Two hours later she signed the paperwork and walked out of Yellowstone Bank with a check, she said, making hers the first business in the state to receive an SBA loan through the coronavirus stimulus bill.
“It was the easiest loan I’ve ever gotten in my life and I’ve done a lot of loans,” Weinreis said. It was six pages of paper, she said, and it didn’t require a personal guarantee or collateral.
The loan kicked in at the right time, she said. She’s only had to close two of their 11 locations and hasn’t let any of her 50 employees go, even though she had one day when “we sold $13 in coffee in a seven-hour shift.”
The National Federation of Independent Business is still hearing more complaints from members than about firms getting funding, said
“I’m just hoping each day gets better,” Harned said.
The 30 million small businesses in the U.S. employ half of the private work force, and many have been forced to close amid stay-at-home orders. Almost a quarter of firms have shut down temporarily, and one in 10 are less than one month away from permanently going out of business, according to a poll released April 3 by the U.S. Chamber of Commerce.
The SBA said as of 4:30 p.m. New York Time on Tuesday, it has received more than 275,000 applications valued at $75 billion since the program went into operation. That amount hasn’t been given to firms yet, but represents the value of loans SBA has registered and guaranteed for lenders to complete the process and disburse funds, according to a senior administration official.
That would mean about 20% of the $349 billion appropriated for the program has already been committed.
‘Little Bit Spotty’
The rollout “has not been ‘flawless’ & the glitches have not been ‘minor,”’ Republican Senator
The system was working Tuesday, but connecting with SBA was still “a little bit spotty,” said
Some banks were accepting applications but not finalizing them because they lacked enough guidance from SBA and the Treasury about questions such as how payroll should be counted and how loans will be forgiven. The Trump administration issued new guidance late Monday night that helped, Merski said.
A major concern is that some small businesses, especially mom-and-pop operations, could get shut out. Borrowers also complained that they are being turned away from banks because they didn’t have an existing lending relationship with them.
Travis Powell, owner of the Best Western Plus Frontier Motel in Lone Pine, California, said he’s reached out to about 32 lenders since learning the two local banks he works with aren’t participating in any SBA programs. None are helping him, most because he doesn’t bank with them, he said.
“It’s pretty crushing,” he said, adding that many of the business owners in the 2,000-person town near Mount Whitney and Death Valley were in in the same boat. “We’ll have to wait in line behind businesses that are in big cities and have these established accounts.”
The rollout of the emergency loan program has been “messy, quite honestly,” said Brooke Mirenda, who runs Sunshine State Economic Development Corp., a not-for-profit SBA lender in Clearwater, Florida.
Jen McMurrough, owner of Little Dogs Resort in Salt Lake City, got her loan Monday, which she said “gives me some breathing room.”
Her business does overnight boarding of pets and day care with grooming, but customers have been scarce because of the coronavirus, McMurrough said.
The loan “means that I don’t have to lay my workers off, it gives me critical cash flow that means I won’t get behind on bills,” she said.
(Updates with Rubio comment in 19th paragraph.)
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