A flow of cash is on the way to small businesses in North Texas devastated by the coronavirus outbreak, but it will take time.
Starting Friday, they can now start to apply for loans or grants under the Small Business Administration's Paycheck Protection Program. It’s part of the $2 trillion relief package signed into law last week.
"I encourage all small businesses that have 500 or fewer people, please contact your lenders. Any FDIC institution will be able to do this. Any credit union, existing SBA lenders and fintech lenders. You'll get the money, you'll get it the same day. You use this to pay your workers. Please bring your workers back to work if you've let them go. You have eight weeks plus overhead. This is a very important program," said Treasury Secretary Steve Mnuchin.
According to SBA district director Herbert Austin, small businesses with under employees 500 can borrow up to $10 billion for payroll, rent, utilities and other everyday bills.
"The part that will be forgiven is the payroll piece," Austin said. "That’s why it’s so critical, because the whole program is to encourage you to keep people employed."
Austin said while banks began receiving applications Friday, it's possible they won't be approved in the same day as expected.
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"Banks are calling me, telling me – people are lining up. I said how many? 100, 200 people are waiting impatiently," he said Friday morning. "So obviously, you’re not going to have answers on 200 applications in one day. The bank is not equipped to do 200 applications in a day anyway."
Fort Worth restaurant owner Adam Jones applied for the loan Friday, along with the an Economic Injury Disaster Loan directly through the SBA. Jones' restaurants Grace and Little Red Wasp are currently operating restrictions due to COVID-19.
"Curbside’s great – but it’s 5 to 10 percent of a normal business. It’s not the same revenue. We still have to operate our restaurants with food quality and safety and everything. Expenses don’t go away," Jones said. "I’ve worked hard my entire life. I don’t expect what I would call a hand-out. I don’t look at this as a handout. Right now, the government needs to do this to help us get whole again so we can create our economy. Our economy works based on everybody doing their part."
The president of the Fort Worth Chamber of Commerce said businesses are desperate for help.
“It’s vital for small businesses. They are hurting. They’re in trouble, and they’re looking for a life raft to hold onto to keep operations going and this PPP program will provide that,” Brandom Gengelbach said.
"It's the opportunity to get immediate access to cash to be able to help them run their operations. So, it's everything from paying rent, payroll and keeping employees employed in their organization. And there's a huge part of this that can turn into a forgivable loan should they maintain some of the specifics such as keeping employees employed through June. So, it really is a vital program."
The Fort Worth chamber surveyed its members recently, and over half who responded said they will not be able to sustain their business longer than 'a few months’ if the current trend continues.
As part of the response to COVID-19, the chamber is contacting all 1,400 members, the majority of whom are small businesses with fewer than 50 employees.
Gengelbach said, “It’s very grim. A lot of the conversations. I compare to calling a loved one who just has lost a family member or a friend. There are some that are quite emotional on the phone.”
The City of Fort Worth shared these points for businesses to keep in mind:
- Loan forgiveness depends on businesses keeping employees on the payroll, or rehiring employees quickly while maintaining salary levels. At least 75% of the loan amount must be used for payroll expenses in order for the loan to be fully forgiven, and loan forgiveness will be reduced if salaries decrease, or if the number of full-time employees declines.
- All small businesses are eligible. This means a business with 500 employees or less and includes nonprofits, veterans’ organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors.
- All loans will have the same terms, regardless of the lender or borrower.
- Unemployment benefits have been extended to self-employed workers, independent contractors, and those with limited work history. Unemployment insurance provisions now include an additional $600 per week payment to each recipient for up to four months.
Gengelbach, who joined the chamber since 2016 and was named president in October 2019, says this crisis is “a test of leadership, a test of keeping morale and spirts high, trying to encourage and strengthen not only staff about the business community as well but great communities like Fort Worth show their true colors and true leadership potential during times like this.”
And after the social distance and shelter in place measures are lifted, Gengelbach says it will be exciting “to watch the Fort Worth community come together in a meaningful way to grow and develop the economy to get past some of the challenges we’re currently facing.”
NBC 5's Lili Zheng contributed to this report.
