Nationwide hundreds of thousands of small businesses are applying for federal relief that was intended to come rapidly.
In North Texas, countless businesses have applied for loans with the Small Business Administration, as well as for the payroll protection program through their respective banks. But many are finding the money is not coming as fast as promised and in some cases, it’s much less than expected.
“The frustrating part is that it was really underestimated how many people would need this assistance and apply for these loans and the SBA was not ready for that,” said Travis Hintzel, owner of Regeneration Arcade in Dallas.
Hintzel said he submitted his SBA application 10 days ago and it has yet to reach the desk of someone who can make a decision on it. Furthermore, even if approved, Hintzel said new guidelines mean he will only be eligible for about $3,000.
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“They’ve changed their criteria on how much money they are going to grant and it’s $1,000 per employee,” Hintzel said.
The payroll protection program is another option that Hintzel said he is pursuing. If approved, he expects to receive about $20,000, 75% of which goes towards employee salaries.
Hintzell said he is excited to be able to help out his employees but said so far the assistance options, which amount to about $8,000, fall short of even paying one month of rent.
“Although that $8,000 will help it is not what we all were promised and had anticipated as some sort of subsidy,” he said.
SMU’s Cox Entrepreneurship Professor John Terry said demand at the moment is slowing down the loan approval process.
“They(SBA) got 400,000 applications last week, a 50-times normal increase,” Terry said.
Terry believes it will ultimately take about $1-trillion dollars to assist all eligible small businesses, which is hundreds of billions more than what has been currently allocated.
“With those numbers(current allocation) we are only going to be able to fund four weeks and if it takes four weeks to get it there, it’s just math, the businesses are going to struggle to get to the other side,” Terry said.