The Main Street Alliance hosted a press call and Q&A for small business owners on COVID-19 grants and loans programs recently. Small business panelists shared their frustration about the difficulties they had navigating through the bureaucracy.
The Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) are included in the CARES Act. They are focused on helping small businesses.
COVID-19 Stimulus Red Tape
Amanda Ballantyne, Executive Director, The Main Street Alliance moderated. She didn’t pull any punches in her opening remarks about the paycheck protection program.
Hundreds of Business Owners
“I don’t think it’s in over reaction to say the roll out has been disastrous. At a time when small businesses in America desperately need cash to keep afloat, we heard stories from hundreds of business owners,” she said.
The complaints from small business owners who tried to access the program ranged from some banks saying they hadn’t implemented it. Others said they would only offer it to existing customers.
Ballantyne summed up the issues in one sentence.
“There was a lot of confusing information from different sources that didn’t align or match up.”
She said that businesses need immediate subsidies to retain and bring back workers.
The panel backed her up with their real-world examples.
Davis Senseman, Owner, Davis Law Offices – Minneapolis, MN explained some of the issues small business clients of the firm have seen.
“With the paycheck protection program, there were promises made of being able to get the money same day. That might be happening for some people, but it’s certainly not happening for small businesses.”
Senseman points to another big issue. That’s the fact that a lot of small businesses don’t have a relationship with the small business administration (SBA) that’s implementing the PPP.
“SBA loans traditionally were some of the hardest loans to get.”
Tiffany Turner – Owner, Adrift Hospitality – Long Beach, WA gave a first hand testimonial.
She says the Friday after The Cares Act was passed, she contacted two banks she has good relationships with about the PPP.
“Neither of them even knew what I was talking about,” Turner said. She tried to apply at other banks but found dwindling money. Some weren’t participating at all.
“If we want our Main Street businesses to survive, we have to make this process easier and faster,” she says.
Andrew and Briana Volk – Owners, Portland Hunt and Alpine Club – Portland, added another layer. The business had been open for almost 7 years when they chose to close their doors on March 16. It was just a few days ahead of the state closing all restaurants to anything but takeout.
“The payroll protection program doesn’t really do a whole lot for us,” Andrew said referring to the uncertainty in the hospitality industry. “Eight weeks of payroll and rent with most going to payroll? We don’t even know if we’re going to be open in eight weeks.”
Natasha Crosby is a sole proprietor/ Real Estate Agent and President of the Richmond LGBTQ Chamber – Richmond, VA. Crosby didn’t like the money was on a first come first serve basis. There was another problem for SMBs without the right connections to approved lenders.
“Only the preferred lenders have the ability to underwrite their loans in house. Everyone else has to send it back to the SBA,” Crosby says.