NBC12, RACHEL DEPOMPA
For thousands of small business owners across the country and right here in Virginia, the $349 billion rescue program just isn’t working.
The paycheck protection program is part of the $2 trillion federal stimulus package passed by Congress. It’s supposed to help small businesses weather this public health crisis. Businesses are supposed to be able to borrow up to $10 million to pay employees and cover rent or mortgages. And in some cases the loan becomes a grant, meaning it doesn’t have to be paid back.
“I thought it was going to be a great thing. It may still be a great thing. If we can get it rolling,” said corporate trainer Charles Long, who owns Written and Spoken, a small business in Chesterfield.
“I had bookings all the way out until mid-June, they’re all gone now,” Long said.
Minutes after the midnight launch of the loan program, Charles was on his computer trying to apply, nobody was taking applications. The next day he tried again. “I tried all the other banks and it was the same story, if you did not have an established account you couldn’t apply.”
Ken Chandler, the owner of nonprofit Richmond Discoveries, said he will be out of business in two months. This would have been the busiest time of year for his company, which employs a few people and gives educational tours across central Virginia. Usually, they are booked in the Spring with trips for students and schools, as well as weekend bookings for others.
“Most of the banks say that you have to be a customer of that bank in order to even qualify for it and there’s just a lot of misinformation out there. My youngest son’s got a business and hew as told by his banker not to apply until early Monday morning. Well at 12:01 this morning he applied and got a response back that they were not taking any more applications because they were overcrowded and over full,” said Chandler.
Howard Pisons, the executive director of the Virginia Small Business Financing Authority, says community banks are eager to help.
“The community banks, I understand, want to make these loans but some of the guidance may not be deep enough for them so they can make those loans properly,” Pisons said.
“Small businesses need to remain optimistic and they need to continue to keep applying for the loans that they believe they’re eligible for and just hold your ground and stick with it,” said Pisons.
Congresswoman Abigail Spanberger, who represents several areas in Virginia including Chesterfield, said her office has received complaints.
“The program went live last Friday, and immediately the calls started small business owners were facing significant challenges,” said Spanberger.
Most distressing to the congresswoman are the calls about banks denying loans to businesses that don’t have a pre-existing relationship.
“That is not the spirit or the intent of this legislation when as a member of Congress I voted for it,” Spanberger said.
She sent a letter this week to the secretary of the treasury asking for more, emergency guidance to come down for these banks.
“We need to ensure that lenders know that this quantity of money that the federal government has put on the table for the purposes of ensuring that our small businesses can survive. It needs to be available to those who apply for it,” said the congresswoman.
Her recommendation to small business owners, ‘don’t give up’ and call your congressperson to share your story.