There’s optimism more help will soon be available to small businesses trying to find ways to say solvent throughout the coronavirus pandemic.
The U.S. Senate has approved a nearly $500 billion coronavirus aid bill after Congress reached an agreement with President Donald Trump. The measure would replenish a small business rescue program, provide hospitals with another $75 billion, and implement a nationwide virus testing program to facilitate reopening the economy.
Trump has announced his support, saying he'll sign the bill if it passes both chambers. The package now goes to the House. Most of the funding, more than $300 billion, would go to boost the Paycheck Protection Program (PPP), a forgivable loan program intended to reduce layoffs and help small businesses pay workers.
The program, created in response to the coronavirus pandemic, ran out of funding last week and stopped accepting applications.
More than 43 thousand Michigan businesses have been approved for PPP loans totalling more than $10.3 billion. Yet, Michigan’s Congressional Delegation sent a letter to the Small Business Administration claiming Michigan entrepreneurs have had difficulty navigating the programs complicated requirements. The letter says Michigan, despite being one of the states hardest-hit by coronavirus, “currently ranks in the bottom third of states receiving small business loans under the PPP compared to the number of businesses eligible”.
Debra Hibblein, a dentist with her own practice in Rochester Hills, says it’s a “full time job” trying to find and apply for resources to cover her businesses expenses during Democratic Governor Gretchen Whitmer’s mandated stay-home order. Hibblein says she’s been denied unemployment insurance, but has been able to help her employees qualify for benefits.
“We still have probably at least $10-12 thousand of carrying costs every month that we have to pay, even though we’re not allowed by executive order to be in our office,” Hibblein said. “It’s a challenge.”
Hibblein says she spent weeks working with different lenders to apply for a PPP loan.
“I finally found someone to, you know, allow me to put in an application. I got an application in about three or four hours after (the PPP) ran out of money,” Hibblein said.
Slotkin says the fourth coronavirus-era economic stimulus will also include $50 billion for another program to help small businesses that’s depleted its funding and is currently no longer accepting applications. The Economic Injury Disaster Loan (EIDL) provides businesses up to a $10,000 loan advance that does not have to be repaid.
Hibblein says she applied for the EIDL program but didn’t receive any communication from the Small Business Administration about the status of her application until about nine thousand dollars appeared in her bank account. She presumes that was the EIDL advance.
Andrea Roebker, regional communications director for the Small Business Administration (SBA), says pending PPP and EIDL applications will begin to be processed once there’s officially more funding for the programs.
Public officials and small business advocates have been encouraging businesses to submit PPP and EIDL applications. From the beginning there were concerns funding would run-out. Rochester Regional Chamber of Commerce President Alaina Campbell says it’s been a confusing and hard to manage experience for entrepreneurs, who she says are often leary of taking on debt, especially during an economic downturn, and mistrustful of government programs.
“They’re not used to asking for help, (and) they’re fearful of programs that they don’t understand. And obviously in the beginning lots of people didn’t understand how these programs were going to work,” Campbell said.
Some large restaurant chains have received PPP loans. Campbell says owners of smaller businesses with fewer employees have fewer resources to devote to applying for aid.
“When you’re a small business owner it’s a really scary thing to figure out to fill these different forms and things,” Campbell said. “There’s small businesses that do their own payroll. Then you apply for PPP and they’re asking for all these different things that you’re not quite sure what they’re talking about.”
Slotkin says there have been concerns from businesses with fewer than 500 employees that haven’t been able to access the Paycheck Protection Program. Slotkin says in negotiations for the next economic stimulus package, the U.S. House of Representatives is seeking to include more guidance to the SBA with the hopes of diversifying the size and types of businesses receiving PPP loans.
*This post was updated on April 21st at 7:41pm to include the passage of a Coronavirus aid bill in the Senate