Like every other storefront in downtown Lincoln, Nebraska, the Coffee House — a cavernous student hangout slinging espresso and decadent pastries since 1987 — saw its revenue dry up almost overnight last spring when the coronavirus pandemic made dining indoors a deadly risk. Unlike most, however, the business wouldn't have access to the massive loan fund that Congress made available for small enterprises in late March.
The reason had nothing to do with the business itself, which had been having one of its best years ever, according to its owner, Mark Shriner. Rather, it all came down to one box on the application for the Paycheck Protection Program money, which asked whether the company or any of its owners were "presently involved in any bankruptcy." Shriner had filed for Chapter 13 in 2018 after a divorce and was still making court-ordered debt payments, so he checked "yes." He was automatically rejected and lost about $25,000 in payroll and other costs that the program would have covered.
"My money is my store's money. When I got divorced and she was entitled to half, it's not like a company can raise money real quick," Shriner said, noting the way in which many small businesses are structured as pass-through entities that pay taxes on any profits as individual income. "All these businesses that had a tough time and are trying to make payments at the same time are getting kind of hosed."...
