(InvestigateTV) - For thousands of small business owners across the country, the $349 billion rescue program just isn't working.
Some small business owners say they have been unable to get loans through the new stimulus program aimed at businesses suffering due to coronavirus-related issues. (Source: Gray TV)
The Paycheck Protection Program is part of the $2 trillion federal stimulus package passed by Congress. It is supposed to help small businesses weather the coronavirus crisis. Businesses are supposed to be able to borrow up to $10 million to pay employees and cover rent or mortgages. In some cases the loan becomes a grant, meaning it doesn't have to be paid back.
“I thought it was going to be a great thing. It may still be a great thing. if we can get it rolling,” said Charles Long, a small business owner in Virginia.
Long owns Written and Spoken, where he is a corporate trainer.
“I had bookings all the way out until mid-June. They’re all gone now,” Long said.
Minutes after the midnight launch of the loan program, Charles was on his computer trying to apply. He said he couldn’t find anyone taking applications. The next day he tried again.
“I tried all the other banks, and it was the same story: If you did not have an established account you couldn’t apply,”
It’s the same story for many small business owners across the nation. Social media lit up after the program went live. From Arkansas to Florida, small business owners expressed frustration.
One person wrote, "Nobody is taking applications unless you are a customer.”
While many had accounts with banks – they did not have loans.
A Nevada small business owner wrote on Twitter: “I can't get a small business loan through them because I have never borrowed money from them.”
The executive director of a Small Business Financing Authority, Howard Pisons, said community banks are eager to help.
“The community banks I understand want to make these loans, but some of the guidance may not be deep enough for them so they can make those loans properly,” Pisons said.
His advice was to continue trying.
“Small businesses need to remain optimistic, and they need to continue to keep applying for the loans that they believe their eligible for and just hold your ground and stick with it,” Pisons said.
Congresswoman Abigail Spanberger, a Democrat representing Virginia, said she has received some complaints.
“The program went live last Thursday, and immediately the calls started. Small business owners were facing significant challenges," Spanberger said.
Most distressing to Spanberger: The calls about banks denying loans to businesses that don’t have a preexisting relationship.
“That is not the spirit or the intent of this legislation when, as a member of Congress, I voted for it,” Spanberger said.
She sent a letter this week to the secretary of the treasury asking for more emergency guidance to come down for these banks.
“To ensure that lenders know that this quantity of money that the federal government has put on the table for the purposes of ensuring that our small businesses can survive needs to be available to those who apply for it,” Spanberger said.
Bank of America states on its website it will only lend to customers with existing loans.
Wells Fargo set a cap on what it could lend and hit that cap by Monday. On Wednesday, Forbes reported the Fed will lift the cap to allow the bank to participate in the program.
Congress is considering whether it should add more money to the program.
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