Over the next two weeks, priority is being given to the country’s smallest employers applying for access to emergency loans.
Starting Wednesday through March 9, only businesses with 20 or fewer employees will be able to apply for aid through the Paycheck Protection Program, which re-launched on Jan. 11.
Herbert Austin, a district director for the Small Business Administration, said the move attempts to target aid to small businesses and companies that struggled to obtain funds during the pandemic.
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“They are being so not much ‘ignored’, but a lot of lending institutions are not paying that much attention to someone who comes in and only needs $5,000. That may be the case in many instances,” Austin said. “Small businesses still, they don’t seem to be getting a lot of the loans that are being put out.”
Austin says more attention is being paid to every application during this round, one of the errors he said was made by the SBA when the program was launched for the first time last year.
“SBA, as you might remember it, made a lot of mistakes the first time around. The intent was to put money in the hands of small businesses, so they can survive the tough times,” he said. “They didn’t pay much attention to a lot of frauds that were happening. They didn’t pay much attention to the people who were ineligible to apply who apply.”
Mia Moss, owner of Black Coffee in Fort Worth, said she plans to apply for a PPP loan over the next two weeks. The coffee shop opened in November 2019 and including herself, there are four employees. Due to the pandemic, they were only open on weekends for months last year.
“It was unreal. We just didn’t know what to do,” Moss said. “I figured if I closed the doors completely, I may not open back up seeing that I was really new. Of course, we hadn’t turned a profit yet.”
Moss applied for a PPP loan last year but was unsuccessful through her bank, she said.
“The first time, it was a disaster. A lot of my friends who are entrepreneurs as well just had a hard time going through their banks to get the PPP. It was a disaster. I’m hoping for the best,” she said. “I was working with my CPA trying to get everything they needed, and it just seemed like I would hit a bump every single time.”
While many businesses will not be eligible to apply during the two-week window, Austin said there is little concern about the funds running out before the March 31 deadline. The entire process during this round is moving ‘slower’ due to more attention paid to eligibility requirements and applications, he said.
Politico reports some bankers are already voicing skepticism about how the changes would work and whether they were even necessary, as lenders say they aren't facing crushing demand that prevents them from assisting small borrowers.
“There is also evidence that the businesses highlighted by Biden are receiving loans. Bank of America, one of the top lenders, said 93% of the 87,000 PPP loan applications it has processed this year have been for firms with fewer than 20 employees,” according to Politico.
Moss said for businesses like hers and others in North Texas, which are navigating both the pandemic and effects of the winter storm, any help is appreciated.
“Growing up, I’ve been through hard times. If I can be honest, there are times where I thought I might even be here. I have had brain surgery. I have made it from almost dying from pregnancy,” she said. “So, I have to remind myself…yes, this is something hard but you’ve been through worse. You can keep going.”
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