Devastation for American small businesses. Federal relief funds ran out almost instantaneously. More may be on the way, but what can be done to save small business?
Jonny Liu, owner and founder of Mantra Coffee in Azusa, California.
Mehrsa Baradaran, professor of law at the University of California, Irvine. Author of: “How the Other Half Banks” and “The Color of Money: Black Banks and the Racial Wealth Gap." (@MehrsaBaradaran)
We put the call out to listeners: 'How are you dealing with the challenges of being a small business owner during the coronavirus crisis?'
Erin called us from North Jersey. Erin's fiancé owns a painting company, and Erin shared his experience applying for the Paycheck Protection Program.
Mary left us a voicemail from New Orleans, Louisiana. She says she’s disappointed that money from the Paycheck Protection Program went to corporate restaurant chains.
An anonymous employee from a large bank called us. He said he’s working on Paycheck Protection Program applications as we speak and that the process has been very “convoluted."
Ellen owns a custom picture-framing shop with two other employees in Massachusetts. She said she applied “almost immediately” for emergency funds and received a confirmation number, but has no way to check the status online. The only notice she’s received was an email informing her the original fund will now supply just $1,000 per employee, instead of the original $10,000 overall.
Linda and her husband own a small, fair trade artisan shop in Albuquerque, New Mexico. She said she tried to apply for the Paycheck Protection Program, but eventually gave up because it was so complicated. She also pointed out the importance of small businesses in local communities.
From The Reading List
Eater New York: "Shake Shack Gets $10M Federal Loan For Small Businesses Affected by COVID-19" — "Big chains like Shake Shack are reportedly some of the first NYC-based restaurants to receive funds from the Paycheck Protection Program (PPP) — part of the first federal stimulus package — that seeks to help small restaurants pay their employees, utilities, rent and other expenses during the ongoing COVID-19 crisis."
Wall Street Journal: "Senators Seek Coronavirus Relief for Small Businesses That Were Shut Out of Loan Program" — "As Congress stands at an impasse over how to replenish funds for a now-depleted small business loan program, Sens. Steve Daines and Cory Booker are pushing for the next round of coronavirus aid to allocate money that would enable local communities to assist very small firms."
Inc.: "The PPP Is Out of Money. Here's Plan B" — "At just before noon Eastern on Thursday--only 14 days after small businesses across America were first able to apply for loans through the $349 billion Paycheck Protection Program, or PPP--the U.S. Small Business Administration announced it had exhausted its allotted funds. The agency, which administers the PPP, shut down its application and ceased enrolling new lenders into the program."
New York Times: "Loan Money Runs Out While Small-Business Owners Wait in Line" — "The $349 billion government program meant to keep small businesses afloat during the pandemic and economic meltdown ran out of money on Thursday — even as many small-business owners were desperately trying to apply for loans. Now they are trying to figure out how to keep their businesses alive while Congress negotiates the possible release of additional rescue funds."
New York Times: "Big Banks Get Ready for Rough Days Ahead" — "While many other industries are deeply threatened by the coronavirus outbreak, the country’s banks are still earning billions, in part because the market volatility it caused was a moneymaking opportunity for their trading divisions."
CBS News: "Paycheck Protection Program out of money: Thousands of small businesses shut out" — "A key piece of the federal government's stimulus efforts to help small businesses and their employees has run out of money, shutting out thousands of potential borrowers who were seeking aid amidst the coronavirus-driven economic plunge."
Washington Post: "Small-business program intended for quick grants is running weeks behind" — "An emergency loan program intended to get money swiftly into the hands of small businesses has all but collapsed under an unprecedented crush of applications and a shortage of funds, overwhelming agency officials and prompting urgent calls for action on Capitol Hill."
USA Today: "Lawsuit alleges Wells Fargo unfairly shuffled Paycheck Protection Program applications" — "A California-based company filed a class-action lawsuit against Wells Fargo citing unfair actions against some small businesses seeking government-sponsored coronavirus relief under the Paycheck Protection Program."
American Banker: "‘Leave room for the little guys’: Square's advice for PPP 2.0" — "Online lenders, which were approved to make emergency government-backed loans to small businesses less than a week before the Paycheck Protection Program ran out of money, hope it will quickly get more funding so they can help steer relief to the smallest companies."
This program aired on April 21, 2020.