Why some business owners are applying for PPP loans at the last minute
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Businesses have one day left to get approval for loans from the $134 billion remaining in the federal Paycheck Protection Program. Now that it’s winding down, some businesses are getting their applications in at the last minute.
Back in April, a PPP loan sounded like a lifesaver to Richard Marks. He runs a professional training company called RDM Management Group, a business built on face-to-face meetings that haven’t been happening.
But Marks doesn’t have any employees. So from the outset, he wasn’t sure whether he was eligible for a loan.
“My interpretation was that I had to have employees on a payroll in order to apply for PPP,” Marks said.
About two weeks ago, Marks heard from another business owner with no employees who received a PPP loan. So Marks applied, and the Small Business Administration approved his application this past Friday. He’s relieved but wishes he’d known sooner that he was eligible.
“If you’re not plugged in, if you don’t know what you don’t know, you end up missing out,” Marks said.
Some business owners are resubmitting applications at the last minute, even though they’ve been trying from the beginning.
“I was just like checking my email,” said Holly Dreeuws, who co-owns Waterline Pools and Spas in San Diego. “I’ve never checked my email as much in my life. Constantly checking to see if I got anything.”
She was rejected four times before finally submitting a successful application. Once because the first round of PPP money ran out. Another bank said she couldn’t apply without an existing account.
After a while, Dreeuws said, she gave up hope. She was even thinking about taking out a personal loan to keep her business running.
But last week, she applied through a new bank and got approved.
“My husband and I were ecstatic. Ecstatic!” Dreeuws said. “It’s been a very stressful few weeks for us, financially.”
Not everyone’s quite there yet. Sherard Duvall, president and CEO of OTR Media Group, a media production company in South Carolina, has applied to seven lenders for a PPP loan without luck so far.
“It’s been a three-month slog and struggle,” Duvall said. “Frustrating is probably the best word to describe it. Upsetting, really.”
One bank did approve an application that Duvall submitted a couple of weeks ago, but he still hasn’t heard whether the SBA has approved it. He applied through another lender last week, but it’s asking for more paperwork.
“It looks like I’m going to be down to the wire,” Duvall said.
Duvall said the PPP money would help him pay employees, utility bills, rent and invoices he still hasn’t paid. But at this point, he has very little confidence that he’ll receive any assistance.
COVID-19 Economy FAQs
Will the federal government extend the extra COVID-19 unemployment benefits?
It’s still unclear. Congress and President Donald Trump are deciding whether to extend the extra $600 a week in unemployment benefits workers are getting because of the pandemic. Labor Secretary Eugene Scalia believes the program should not be extended, and White House economic adviser Larry Kudlow said the additional money is disincentivizing some workers from returning to their jobs. Democrats want to keep providing the money until January.
As states lift restrictions, are people going back to stores and restaurants?
States have relaxed their restrictions, and many of us have relaxed, too. Some people have started to make exceptions for visiting restaurants, if only for outdoor dining. Some are only going to places they trust are being extra cautious. But no one we’ve talked to has really gone back to normal. People just aren’t quite there yet.
Will surges in COVID-19 cases mean a return to lockdowns?
In many areas where businesses are reopening, cases of COVID-19 are trending upwards, causing some to ask if the lockdowns were lifted too soon, and if residents and businesses might have to go through it all again. So, how likely is another lockdown, of some sort? The answer depends on who you ask. Many local officials are now bullish about keeping businesses open to salvage their economies. Health experts, though, are concerned.
You can find answers to more questions here.
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