Small businesses struggle for cash and approval in new federal loan programs

Coronavirus

TAMPA (WFLA) – As small businesses continue struggling to make ends meet due to the COVID-19 quarantine, two new federal loan programs meant to alleviate their financial woes are struggling themselves.

The Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) have both been plagued by delays and confusion for lenders and borrowers alike.

Some initial promises from the Trump administration have proven to be false.

“You get the money, you’ll get it the same day,” said Treasury Secretary Steven Mnuchin. “Please use this money to pay your workers.”

Robert Shindler is a CPA in Bradenton who said he’s filed nearly 80 PPP and EIDL loan applications for his clients and has more to do.

So far, he said none of them have seen a penny — and in most cases, they don’t even know if they’re approved.

“Nobody has money in the bank,” said Shindler, whose clients are mostly in Sarasota/Bradenton but has several more in about a dozen states. “At best, they have a month or two before they have no money for food or mortgage. Banks are not offering any help at all.”

On Friday morning, Sen. Marco Rubio tweeted that the Treasury Department is expanding the number of lenders, eliminating the requirement to borrow from an existing lender and adding technological capacity to accept more applications. He also noted that nearly half a million loans had been made worth more than $124 billion.

But 8 On Your Side struggled to find Tampa Bay businesses that have received any money, and Rubio warned that more money is needed, or the $350 billion initially allotted may run out.

“It better get done, otherwise there will be real panic,” Rubio said on Wednesday.

Shindler says he just found out last night that the Small Business Administration (SBA) changed the details of the EIDL loan program again, lowering the advance amount from $10,000 total to $1,000 per employee.

Many of Shindler’s firms are small enterprises with 1-3 employees, so what looked like a $10,000 advance that the business wouldn’t have to pay back if the loan was denied turned into a much lower benefit than expected.

Shindler is also concerned that more personal information was required on these applications than he says he’s ever seen before in his nearly 40 years on the job.

He worries that he exposed some of his client’s private details to the government, and that the changing guidelines might be making him look bad.

But in the end, Shindler said his clients were left with no other choice than to apply for the loans.

“I have 255 clients,” Shindler said. “My advice to them immediately was let’s get every application in we can. Because you need the money! Period. Even if you don’t need the money, you’re out of business! You need the money, this is not gonna end tomorrow.”

Today the loans expanded to include independent contractors and people who are self-employed which will even further stress the programs.

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