Thousands of Small Business Owners Have Not Gotten Disaster Loans the Government Promised Them - GovExec.com

Thousands of Small Business Owners Have Not Gotten Disaster Loans the Government Promised Them - GovExec.com


Thousands of Small Business Owners Have Not Gotten Disaster Loans the Government Promised Them - GovExec.com

Posted: 20 Jul 2020 10:00 AM PDT

A $360 billion stimulus program that offers disaster relief to small businesses has been hobbled by delays and confusion, leaving millions of applicants harmed by the coronavirus pandemic waiting months for grants and loans — if the funds ever came at all.

The Economic Injury Disaster Loan program, or EIDL (pronounced "idle"), was supposed to give small businesses grants and low-cost loans to help with the economic fallout from COVID-19. Though EIDL has gotten less attention than the $660 billion Paycheck Protection Program, 8 million small businesses have applied since it was opened to coronavirus-related applications in March. Unlike PPP, the EIDL loans come directly from the government and small businesses can use them for six months' worth of general operating expenses, not just payroll.

But the Small Business Administration took months to process the loans, with an average wait of 41 days, according to congressional testimony from the official in charge of the program, Associate Administrator James Rivera. At a July 1 hearing, Rivera said the SBA has stepped up its pace and was now processing applications in five days, with 99% of approved funds deposited.

"We're 99% disbursed," Rivera said at the hearing. "That's money in their bank."

That's at odds, however, with a nationwide survey conducted on July 6 and 7 by the National Federation of Independent Businesses, which found that many applicants had not received promised funds. Of the business owners who said they applied for EIDL, 67% said they'd been approved but only 55% said they'd received the funds. About a quarter said they were still waiting to hear if their loan was approved. The survey was sent to 300,000 small business owners, and 615 responded.

The SBA declined to make any executives available for an interview to clarify questions about the EIDL program. An agency spokeswoman, Carol Chastang, didn't respond to questions about the apparent discrepancy between Rivera's testimony and the NFIB survey.

Some of the discrepancy could be the result of widespread confusion about the program, according to NFIB's research director, Holly Wade. She said NFIB heard from many applicants who didn't realize they had applied for a loan when requesting a grant, thought the grant was the loan or figured they had done something wrong when they didn't hear anything from the SBA for months. "The lack of communication proved very confusing and stressful for many EIDL applicants, which is reflected in the incongruent survey data and statements from the SBA," Wade said.

Out of $360 billion available, the EIDL program has lent $130 billion so far, leaving $230 billion remaining, Rivera said at the hearing. ProPublica and other news organizations are suing the SBA to obtain EIDL data that the agency has yet to disclose.

Jaja Chen, the co-owner of Waco Cha bubble tea shop in Waco, Texas, applied for an EIDL advance and loan on March 29 and was approved in June, but she still hasn't received the money. A local SBA official told Chen's company that the agency was having trouble processing direct deposit information.

"The system had a temporary glitch that affected initial disbursements," the local representative, Sean Smith, said in an email to Chen's company. "There is a chance that some people got overlooked for the initial disbursement and the [SBA] is trying to go through the apps to see that everyone that is due an initial disbursement will get one."

Smith didn't respond to an email seeking comment. Asked about the "glitch," Chastang didn't address it. "The EIDL Advance program is providing millions of dollars in relief for America's small business owners," she said.

Between the loss of income and restrictions on food service, Chen had to delay the opening of her storefront and reconfigure her business for to-go orders.

"We can't just continue waiting," Chen said. "We are very thankful that despite the federal issues we have been able to actually continue to grow our business and recoup some of our losses through creating new ideas and concepts."

EIDL has existed for decades and typically helps businesses struck by natural disasters like hurricanes or floods. It's never been used for a nationwide emergency before. Rivera said the agency is now processing as much as $24 billion a week, compared to $11 billion for all loans arising from Hurricane Katrina.

While Congress authorized the SBA to provide grants of up to $10,000 and loans of up to $2 million, the agency capped the grants at $1,000 per employee and the loans at $150,000. The SBA never announced the limits and didn't publicly acknowledge their existence until the July 1 hearing, leading to widespread confusion among business owners about why they received less money than expected.

"We didn't communicate ahead of time, and in hindsight we probably should have," Rivera said at the hearing, as lawmakers recited constituents' complaints.

Rivera said the SBA imposed the caps to conserve cash since it didn't have enough funding for all the applications it received. "We would have run out of money," Rivera said at the hearing.

However, the administration did not request more funding for EIDL in April when it asked Congress to replenish the PPP program. Half of the 8 million applications for EIDL came in the first two weeks.

Chastang didn't respond to a question about why the SBA didn't ask for more funding if it determined there wasn't enough. She said "most applicants will not be affected by the limit" because loan amounts are based on six months of business needs and the average loan is only $62,000. However, the cap contributed to lowering the average loan size; at the hearing, Rivera revealed that 19% of applicants sought more than $150,000.

In April, the SBA shutdown EIDL applications while it overhauled software and added thousands of staff through a contract with Rocket Loans. When the SBA reopened its online portal, it accepted applications from agricultural businesses only. Farm businesses were newly eligible for EIDL assistance, but they also have access to subsidies from the U.S. Department of Agriculture.

Rivera, at the hearing, didn't say why the SBA decided to prioritize farmers, simply calling it "an agency determination."

"Congress gave us the authority to make loans to farmers," he said.

That answer didn't satisfy the committee chairwoman, Rep. Nydia Velazquez, D-N.Y. "But Congress didn't give you the authority to shut down the portal to every other borrower injured by COVID-19," she shot back.

The EIDL portal reopened for non-farm businesses on June 15. Chastang said, "SBA reopened the EIDL application portal on a limited basis to agricultural enterprises only in order to provide farmers and ranchers an opportunity to apply for and receive EIDL assistance that they were previously not eligible to receive."

This article was originally published in ProPublica. It has been republished under the Creative Commons license.  ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for their newsletter.

EDA awards COVID-19 small business grants - The Suffolk News-Herald - Suffolk News-Herald

Posted: 20 Jul 2020 04:33 PM PDT

Dozens of small businesses throughout the city received nearly $200,000 in COVID-19 small business grants from Suffolk Economic Development Authority during its June distribution.

Grant amounts included $3,700 for 15 businesses, $2,700 for 27 businesses, $1,700 to 32 businesses and $700 for 11 businesses.

In all, 85 city businesses received $190,500. Fifteen of those businesses received the highest amount, $3,700. Those businesses included Al Forno Pizzeria, Boogies Soul Food Restaurant, C-Fit Studio, El Korita Restaurante Mexicano, Happy Nails, Kitty's Beauty Salon, LA Nails, LAS Enterprise/SuperCuts, Peking House, Pro Nails, Ryan's Steaks and Cakes, Sushi Aka, The Pinner House, The Truitt House and Triple T Sports Center.

To qualify for the grants, the businesses must have had no more than 50 full-time equivalent employees as of March 24, be in good standing with the city and have a current city business license, have a physical presence in the city and be established prior to Jan. 1. They also must have experienced losses in operating hours, revenue and/or reductions in staffing due to various executive orders and directives from Gov. Ralph Northam.

In particular, that included Executive Order 53 in March that placed restrictions on restaurants, recreational, entertainment, gatherings, non-essential businesses and closed K-12 schools throughout the state.

"We spent a lot of time debating about how to be effective … and make the most impact that we could," said EDA director Kevin Hughes during an EDA board meeting earlier this month.

Businesses can use the money to pay for private utilities, rent or mortgage payments, insurance or similar expenses, products or services directly used in production of products to sell or provided services, or operating equipment.

For the first round of grants, Hughes said they accepted applications through a two-and-a-half week window in June.

Those that received the $3,700 amounts, according to Hughes, were businesses that were directly affected by Executive Order 53 and did not receive federal money, while those receiving the $2,700 grants were also directly affected but did receive some federal assistance. Companies that received $1,700 grant awards had indirect effects from the coronavirus pandemic and the state executive orders — ones Hughes said were not forced to close but had to limit their operations. Ones receiving lower amounts, Hughes said, felt indirect losses but were not necessarily shut down by Executive Order 53.

Broken down by location, 40% of businesses receiving grant money are from the central (non-downtown) part of the city, 32% are from downtown, 24% from North Suffolk and three% from the villages. City restaurants received more grants than other businesses, capturing 29 percent. Medical services made up 16 percent, 14% were retail businesses, 11% were salon/hair businesses, 9% hospitality, 6% gyms and 2% childcare.

"We feel pretty certain that we'll do this multiple times throughout the rest of the year," Hughes said. "So we are learning from it."

COVID-19 Small Business Grant recipients

$3,700 (15)

Al Forno Pizzeria

Boogies Soul Food Restaurant

C-Fit Studio

El Korita Restaurante Mexicano

Happy Nails

Kitty's Beauty Salon

LA Nails

LAS Enterprise/SuperCuts

Peking House

Pro Nails

Ryan's Steaks & Cakes

Sushi Aka

The Pinner House

The Truitt House

Triple T Sports Center

$2,700 (27)

Amici's

Baron's Pub

Coastal Styling Studio

Cross Fitness

Decent People Taproom

Decoys Inc

Derl'z Restaurant & Pub

E Nail and Spa

Enhanced Nutrition & Energy

George's Steak House of Suffolk

Hair Graphics

Harper's Table

Holland's Produce

JP Bridge Road Subway — 3575 Bridge Road

JP Harbourview Subway — 5887 Harbour View Blvd.

Lavish Nail Spa

Nansemond Brewing Station

RSCH, Inc (Riverstone Chophouse)

Steve Nails

Suffolk BBQ Co. — Airport

Suffolk BBQ Co. — Main Street

Sugar Mama's Bakeshoppe

The Catering Place

The Plaid Turnip

The Spa & Laser Center

Vintage Tavern

World Class Too

$1,700 (32)

Bennetts Creek Marina, Inc.

Bennetts Creek's Home Away From Home

Cecelia's Boutique & Gifts

Cedar Point Country Club

Coastal Pest Control

Comfort Suites

D.B. Bowles Jewelers

Dynamic Movements School of Performing Arts

Early Resultz Daycare & Learning Center

Embroidery Etc.

Enochs Eye Care

Hackworth Printing & Graphics

Harbour View Dental Center

Holiday Inn Express & Suites

J&L Rentals and Party Supplies

Jana Boyd DDS

Knox Audiology

M&M Silk Flowers

Major Signs

McKenzie Foot & Ankle

Party Time Entertainment

Plastic Surgery Specialists of Virginia

Quality Time Child Care Center

Robert E. Anderson DDS

Scrubs Plus of Suffolk VA

Shotz Portrait Studio

Simply Vintage

SNKR Tub 7/8 Daequan

Suffolk Animal Hospital

Therapy Concepts

Totally Taffi

Trinity Christian Bookstore

$700 (11)

A&A Home Health

Bay Cabinets, Inc.

Best of Care Home Health

Hampton Roads Moving and Storage

Harris Funeral Home

Michael D. Eberhardt, PC

Nursing Education and Study Center

Relay Electric

Spacesaver Storage Solutions

T.E. Cooke-Overton Funeral Home

Wal-Win Carpet

Small business grant applications now available in Lexington - WTVQ

Posted: 21 Jul 2020 03:38 AM PDT

LEXINGTON, Ky. (WTVQ)- Applications now are available for grant funds for small businesses in Lexington and Fayette County.

Mayor Linda Gorton says the council approved a $2.5 million small business stimulus package. It will award up to $25,000 grants to companies for COVID-19 expenses.
That can be payroll, buying personal protective equipment, , cleaning buildings or other costs related to staying open during the coronavirus or the impact of the shutdown and reopening.

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Gorton says the goal is to use half of the money for businesses owned by minorities and women.

Check out the requirements and a sample application here.

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