By Allison Perrine
Small businesses are facing a crisis right now. As shutdowns related to the COVID-19 pandemic remain in place, many businesses have had to reduce hours, lay off employees or close their doors completely.
To help ease the economic burden arising as a result, Congress passed the Coronavirus Aid, Relief and Economic Securities (CARES) Act, a $2.3 trillion relief package. It includes a Paycheck Protection Program (PPP) loan package specifically designed to support small businesses and their employees.
However, the process to obtain a loan has not been easy for everyone. Money from the first round of funding through the Small Business Administration (SBA) dried up quickly with many angry the funds seemed to go to large corporations instead of the small businesses it was purported to help. A number of those companies have returned the money after public backlash.
A second round of funding opened April 27, with the SBA allowing lenders to process another $310 million for companies’ payroll costs. According to the U.S. treasury department’s information sheet, loans can be used for payroll costs and benefits, interest on mortgage payments, rent and utilities for the business.
For Stephanie Cartier, founder of No Limits Café, a nonprofit in Middletown, the process of applying for a PPP loan has been arduous. Her restaurant opened a few weeks before the pandemic hit and employs people with intellectual disabilities. As a new business, her salaried and hourly workers are unable to collect unemployment because, by law, they have not worked long enough to be eligible for it. Obtaining funds from a PPP loan was especially important to Cartier to carry her employees through the shutdown.
Cartier said it took her five-and-a-half hours to fill out the application April 4, which she described as “very difficult” and “stressful.” It is not geared toward nonprofits, she said, which made the process harder. Applicants must say what percentage of ownership they have in the business, but “nobody owns a nonprofit – nobody,” said Cartier.
Once she completed the application, its status was marked “under review.” She received an email from her bank saying that her electronic signature was missing from the application. After correcting that, she received the same message two more times.
“It just kept saying under review, under review,” said Cartier. And soon, the money in the program ran out. “I was at my wits’ end. I was waiting – hopeful that another round would come. I didn’t know what to do.”
She reached out to an executive of PNC Bank. “I never thought I would hear from him, ever,” said Cartier. But he gave her a call shortly after receiving her email. Together they determined the problem and he sent her application to a bank employee who made the necessary changes. Cartier said the employee who helped her had been working for three weeks straight, seven days a week, for more than 12 hours per day, handling these applications.
“Because this was all so new, the rules were not clear for everybody that was doing it,” she said.
Cartier has still not received confirmation that she has secured the loan, but she is hopeful. Even if she does get it, she still has questions about the process that no one seems able to answer, she said. She wonders, if her employees receive a weekly pandemic payment, are they able to collect PPP loan money? And since her calculated loan average is not enough to pay full salary for eight weeks, how does she figure out how to pay each employee?
Though the loans are forgivable, she fears that if these questions go unanswered and she does something incorrectly with the money, she will be penalized when it comes time for repayment.
“We’re a nonprofit. I’ll have to pay back all that money,” she said. “I’m scared.”
Cartier has sent a list of questions to Sen. Chris Smith’s office and has attended at least five webinars trying to get some answers. For now, she remains hopeful, she said.
Unlike Cartier, some business owners have not been so lucky.
Eric L. Wagner, president of the Red Bank-based Architects Kellenyi Johnson Wagner, voiced his frustrations in a letter to Wells Fargo Bank. As a longtime small business customer, Wagner said he was “extremely upset” when he found out that his company had missed the bank’s window for applying for the PPP loan.
He inquired about the loan with a Wells Fargo banker and wrote to its customer service department April 2. When the first round of funding opened April 3, he tried to log in but the bank’s website was down. And by the end of the day Sunday, April 5, the program was closed to new applicants.
“Please tell us where to turn,” he wrote. “Other lenders are only taking applications from their existing customers. We meet all of your criteria,” like being a small business with less than 50 employees, with active small business accounts, “excellent” credit and loss of business from the pandemic.
“We have all the documents that the SBA requests ready but have no lender available to help us. When will you be able to serve all of your other customers who have nowhere else to turn?” he wrote.
On Monday, April 27, Wells Fargo posted on its Facebook page that it had “mobilized thousands of employees” and established new automation and technology services in an effort to process more applicants at a faster rate.
“However, we cannot confirm that all applications will be submitted and processed by the SBA before the funds are depleted, and we anticipate that demand will exceed available funding,” Wells Fargo wrote. “Since all applications are being handled online, our phone and branch bankers unfortunately will not be able to provide updates on the status of your application.”
In a written message sent to The Two River Times, Wells Fargo representatives said that due to staffing impacts resulting from their response to COVID-19, response times may be longer than usual. The fastest service option for bank users is on wellsfargo.com or through the Wells Fargo Mobile app. “We will respond as soon as possible.”
“These are truly unprecedented times that we know are impacting both you and your business, and we will continue to partner and communicate with you throughout this crisis.”
The article originally appeared in the April 30 – May 6, 2020 print edition of The Two River Times.
