Small business owners who have been anxiously waiting on funds from the highly touted Paycheck Protection Program that is supposed to help them keep their employees on the job as the economy attempts to recover from the COVID-19 shutdown are still waiting with no disbursement date in sight.
According to a report in the Wall Street Journal, "The $350 billion Paycheck Protection Program opened a week ago with loans to companies with 500 or fewer employees and expands Friday to include independent contractors and self-employed individuals. Yet even as the program expands, the first applicants are still waiting for funding, fueling anxiety among business owners whose revenue has tanked and whose bills are piling up."
As Amanda Ballantyne, executive director of the Main Street Alliance explained to the Journal, "There are very few business owners who have successfully gotten the money. Money isn’t flowing yet.”
According to the report, Ballantyne claimed there are multiple reasons for the delay of desperately needed funds designed to keep businesses afloat and employees in a position to pay their bills.
"Chief among them is inadequate guidance given to banks from the Small Business Administration related to loan closing, as well as the agency’s technology used to process loans and approve new lenders," The Journal reports," the Journal reports. "The SBA’s loan portal, called E-Tran, has some banks inputting borrower information manually, with bank employees spending anywhere from 25 to 75 minutes per application, a trade association executive said. And banks say they have experienced crashes repeatedly, including a lengthy outage that at least some experienced Tuesday."
According to Paul Merski, executive vice president of the Independent Community Bankers of America, "The sheer volume of people trying to get into the system at the same time overwhelmed it."
New York attorney Adam Greene told the Journal that "the loans of 20 of his nearly 50 clients have been approved by lenders ranging from top national banks to smaller regional banks. But none of the loans has been funded," with the lawyer lamenting, "They were expecting money within one day. Now it’s become more realistic to think it will be within 30 days.”
The SBA states that "550,000 loans worth $141 billion have been approved under the program as of Thursday," but one business owner claims he hasn't seen a dime.
"Eric Sandoval, who runs an exotic-car-rental and driving-tour business in Golden, Colo., has applied for loans under both programs and said he is still waiting for a response. Mr. Sandoval said six banks initially rejected his application for a Paycheck Protection Program loan, although he was later able to file through an online broker and his main bank," the Journal's Yuka Hayashi reports. " Mr. Sandoval, 42 years old, counts himself as a fan of President Trump, but said he rolled his eyes when Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza said the Paycheck Protection Program is off to a strong start."
“I just know that it’s not getting in the hands of actual businesses,” Sandoval told the Journal. “Getting the money out of the government’s hands, out of the banks’ hands into the actual business owners’ hands. That’s where the problem is.”
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