Small Business Owners Left Frustrated After PPP Loan Money Runs Out
The federal government's $350 billion loan program meant for small businesses to continue paying their employees has run out of money. It leaves many Charlotte area business owners who weren’t approved for a loan worried they won’t be able to pay their expenses for the next few months.
The Paycheck Protection Program, or PPP, was meant to give small business owners with fewer than 500 employees the money they need to pay salaries and keep the lights on for up to two months during the coronavirus pandemic. But the program has been beset by technical issues since it began on April 3, frustrating business owners.
Small businesses owners in Charlotte like Scott Lindsley say PPP’s application process has been confusing. He runs a bar and social space in NoDa.
"It’s a comfort level," Lindsley said. "You know, we’re not on the verge of closing or anything. But the funds were supposed to be there because everybody has to either shut down and cut back on what they’re doing, so it would make up for that. We have had to lay off half of our workers. You know, we wouldn’t have had to do that had we gotten the loan."
Lindsley applied for a loan through two banks he has business with. One didn’t go through for technical reasons, and the other bank didn’t send him a response until after the program’s funding was gone. Lindsley asked friends on Facebook on Thursday if they had any luck getting a loan. More than 100 people responded with stories. Some were business owners themselves, others worked for a company that had applied for a loan.
"For the most part, nobody had gotten anywhere -- our story seemed pretty typical," Lindsley said.
Kristen Hall runs a dog daycare business in Charlotte. She said she was ready to apply with her bank as soon as applications opened on Friday, April 3. But her bank wasn’t ready for her application, and she couldn’t find another bank that would accept one from her. Most banks required people to have a previous loan or banking history to submit one.
"I felt like everything that I’ve spent the last 11 years working towards, really could potentially be erased without getting this funding," Hall said. "I really felt like getting the PPP loan could mean my business surviving or not."
Hall eventually got an email at around 6 p.m. on Thursday of this week. She’d gotten a loan through a fin-tech company the federal government had decided could also take loan applications.
Other business owners who spoke to WFAE said it was difficult to find out which payroll and tax documents they would need to show for their loan application to be approved. Some also felt there was poor communication between the Small Business Administration, which is guaranteeing the PPP funds, and the banks who were giving them out.
One person who had an easier time was Fabi Preslar. She said she had her funds within a week of submitting an application with her bank.
"It was just very simple, and also including in professionals like my CPA and my lawyer, and it was just a very fluid and simple process," Preslar said.
One moment did worry Preslar: she still hasn’t seen paperwork that will ensure her PPP loan is forgivable. Under the program, businesses can have their loan forgiven if 75% of it is used toward certain expenses, like salaries and rent. For many banks, those documents aren’t available yet.
Congress and the Trump administration are negotiating over another $250 billion extension for the program, but no extra funding has been approved as of Friday.
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