SMALL businesses are gearing up to try to get their bite from the $310 billion small-business stimulus program that goes live on Monday.
The original PPP ran out of money last week after big businesses cashed in and soaked up $millions, causing national outrage.
Small family businesses have been desperately trying to adapt and stay afloat after being forced to close due to coronavirus and social distancing measures and keep their workers employed.
At 1 per cent interest, the forgivable loan guarantees that employee and compensation levels are maintained, saving a lot of jobs as over 26 million Americans have lost their jobs since coronavirus hit the US.
Business owners are often being tossed between banks before finding any that will take their applications for relatively small Paycheck Protection Program loans.
Nearly 80 percent of the small businesses that applied for a loan were still waiting for an answer as of April 17, the day after the money dried out.
Businesses are now back to square one at the mercy of the first-come-first-served basis and their place in the queue for a second time.
Many got caught short after pre-emptively paying their employees for the month they have to spend in lockdown only to find themselves caught up in red tape and being held off by lenders like Wells Fargo.
Money is swiftly drying out for businesses that depend on footfall, like family diners, repair facilities, clothes shops, gyms, bars and cafes.
Business owners say they have "been let down too often" and that they are "anxious" as lenders won't tell them where they are in the queue.
Sam Donald, owner of Cranberry Island Boat Yard near Bar Harbor, Maine, said: “The worst part about it is the uncertainty, and not knowing whether I should tell my crew they will have a job or they should all go get their fishing licenses or something.
“If the summer goes badly for us, I could be in real trouble without this loan.”
Owners are now forced to gamble between spending money on measures to help them re-open and paying their employees in the hope of getting a loan, or holding back until the money is in their hands in what could take weeks.
Most of these businesses will hit an unrecoverable stage should they not be able to access the funds by the end of the month.
Caty Carlin, who owns North Carolina clothing store the Grapevine told the Washington Post that the hardest part is “not knowing what the next step is, not knowing if I am going to need to sell off inventory and close.
"Without any kind of support or loan, it will be virtually impossible for me to get out of this.”
Many businesses have been let down by banks that weren't able to submit their applications in time.
Smaller non-bank lenders also had to wait several days after the program launched to gain access to the fund, but the money had run dry by the time they were ready.
Trump signed a new measure Friday pouring an additional $310 billion into the program as part of a larger $484 billion coronavirus spending bill.
The Small Business Administration (SBA) said it would begin accepting applications again at 10.30am Monday, setting off a frenzy among lenders and small businesses to scoop up the funds.
The original program was hit by technical issues, systemic glitches and logistical teething problems with many lenders caught unprepared.
This time, lenders say they have thousands of applications ready, and some have developed new technology to make it easier to load loan applications into the SBA’s computer systems, in hopes of gaining an advantage.
Some bank executives said they are preparing for the money to run out within 48 hours and are planning to stay up all night once the SBA begins taking applications again.
Wells Fargo has said that it is working as quickly as possible on customers’ loan applications and has mobilized thousands of employees to work on the program.
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The bank initially cut off applications just days after the program launched, saying it was limited by a cap on its growth imposed by federal regulators.
Congress has since earmarked $60 billion of Monday's $310 billion infusion into the program for small banks with no more than $50 billion in assets, in hopes that more of the money will reach family businesses and companies in rural areas.
Industry officials still warn that that does not guarantee everyone will be able to secure a loan.
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