A Utah small business owner has found federal aid hard to come by.
A Utah small business owner has found federal aid hard to come by.
Utah company WolfTraders was one of the small businesses that applied for assistance through the Paycheck Protection Program (PPP) when COVID-19 hit, although it didn’t get quite what it needed.
Owner Darin Newell said WolfTraders did get a loan but far less than what it was expecting.
“We did get the PPP. We should have gotten $17,000 but they cut it in half to $9,000,” Newell said. “Our rent is $9,000, so that only helps with rent for one month, nothing else.”
The company was denied an economic injury disaster loan, Newell said. It had hoped to obtain $200,000 to $400,000, but Newell said his personal credit score was an obstacle.
“This is total discrimination at a time like this," he said. "[My personal credit score] should have nothing to do with it. Most small business owners are maxed out on credit because we are trying to use everything we have to grow our businesses.”
There’s no denying that the PPP was flawed, as large companies got thousands of dollars in aid that was meant to go to small businesses as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act.
By April 9, the Washington Post reported that the EIDL program, which is often used to provide funding for businesses affected by tornadoes and wildfires, was low on funds.
In a webinar for Washington D.C. area real estate agents, hosted by the National Association of Real Estate Brokers (with a Democratic Senate staffer participating) a Small Business Administration (SBA) lending specialist spoke, according to the Post article published April 15.
“Sadly to say, we’re getting low on funds,” said SBA lending specialist Roderick Johnson.
On April 10 multiple lawmakers from both parties published a letter noting that “the SBA has failed to issue final guidance and award grants in a manner consistent with congressional intent.”
This was partly in reference to the waiting period that applying small business owners faced – not the three days required by law, but weeks. Sen. Ben Cardin (D-Md.) said the agency was not complying with the law, possibly for multiple reasons.
“The SBA is not complying with the processing of [disaster loans] in an appropriate manner because they don’t have enough resources to give them out,” Cardin said. He told the Washington Post that that SBA “slowed down the grant program because they don’t have enough money and don’t know what to do.”
For businesses like Newell’s WolfTraders, which sells camping and outdoor adventure equipment, such as sleeping bags, hammocks and camping furniture, and those who were shut out of aid completely, the clock is ticking. Many businesses do not know if they’re going to make it to 2021.
A May survey by CNBC and SurveyMonkey questioned more than 2,000 small business owners. Respondents noted that only 45 percent of business owners applied and of that number only 13 percent were approved for any amount of aid. The survey revealed that 31 percent of business owners surveyed believe they can make it a few months, and 7 percent said they could only make it for less than a month with current lockdown conditions.
That could be dire news for U.S. small businesses, and also bad for the country’s economy.
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