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Small businesses uncertain about emergency loan applications

Justin Ho Apr 15, 2020
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Small businesses are still waiting on money from the Paycheck Protection Program. Victor J. Blue/Getty Images
COVID-19

Small businesses uncertain about emergency loan applications

Justin Ho Apr 15, 2020
Small businesses are still waiting on money from the Paycheck Protection Program. Victor J. Blue/Getty Images
HTML EMBED:
COPY

The Small Business Administration’s pandemic emergency lending program has approved more than 1.3 million loan applications. The SBA said those loans are worth almost $300 billion, putting the average under its Paycheck Protection Program at roughly $220,000.

The SBA reported this week that the industry sectors with the most approved loans are construction, manufacturing and technology. Businesses in California, Texas, and Florida are receiving the most money — which makes sense because they’re the three most populous states.

New York is fourth, but it came in behind Illinois. That worries New York City small business commissioner Gregg Bishop.

“What I’m hearing from small businesses is either their bank is not participating because they have a smaller community bank, or their bank got online much later than the rest of the United States,” Bishop said.

Some businesses aren’t sure where their applications are in the process. Ashwin Deshmukh, who owns a cocktail bar in Manhattan, thinks he might have been approved. His bank accepted all his paperwork, but he hasn’t gotten any confirmation.

“I think it’s impossible to tell if anything’s happened until you have the money in your account,” Deshmukh said.

It’s a similar story for Washington D.C. marketing consultant Alexandra Mason, who applied back when the program started.

“I sent in my application and they acknowledged that they have it,” she said. “And then I haven’t heard a thing for a week.”

Mason said until she sees the loan in her business account, she’ll remain skeptical about the SBA program. And she said she’s not the only small business owner to feel that way.

“I’m never going to pooh-pooh a million businesses getting approved,” Mason said. “But you don’t have to look very far. I mean, just look at Twitter, and it’s just scrolls of people saying ‘This isn’t what I’m experiencing.'”

Those small business owners are hoping that their loans get approved as soon as possible. The Wall Street Journal reported today that the SBA program is about to run out of money.

COVID-19 Economy FAQs

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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