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It’s easy to get lost in the SBA loan shuffle

by Peter Weinberger | pweinberger@claremont-courier.com

You’ve probably heard stories of small business owners attempting to get help from the Small Business Association (SBA) coronavirus bailout using the Payroll Protection Program.

With $349 billion available to assist businesses just like the Claremont COURIER, one might think it would help a lot of struggling small businesses keep people employed. And the reality is it has. For some.

So why are thousands of businesses wondering what happened to all that money? With a health crisis impacting every US citizen, the amount of money needed to help small businesses is staggering. It will never be enough, even with an additional $300 billion more being earmarked for a second round of loans.

The bigger issue that will surely get under your skin is how larger companies—some with hundreds of franchises worth millions of dollars—received money because each franchise applied separately. Or so they say. And most of these larger companies had the resources and connections to apply quickly, getting on top of the PPP applicant list.

That’s why Ruth Chris Steak House, with 150 franchises valued at $250 million, received $20 million. Or Potbelly Sandwich Shops with 400 franchises received $10 million. And there are many more.

At least Shake Shack, worth $1.6 billion, decided to return the $10 million they received. These are all very deserving businesses that need help from the government, but there’s no way these companies qualify as small businesses. They simply used loopholes in the PPP program to receive grants. No wonder after 12 days the money was gone.

Now we are going into round two, as more PPP money will be become available any day now.

I fully understand what a logistical nightmare this must be to implement, especially oversight to make sure deserving businesses get a fair share. But it hasn’t been a cake walk for those of us attempting to apply either.

Back in mid-March, it was clear aggressive stay-at- home orders were coming and I knew it would have a huge impact on the COURIER’s overall revenue. Then, almost overnight, grants became available from the SBA, Facebook and Google that were all concerned about the plight of small businesses or small local news outlets.

I applied with all three immediately, spending hours filling out paperwork. At the time, the PPP loan program was not yet public, so I filed for an SBA loan. Facebook operated quickly, sending me a form response saying we were rejected. Google soon followed. No reasons given.

But based on previous experience with these companies and after reviewing the list of initial winners, I can safely say the COURIER was either too small, or dinged for being a newspaper business. To their credit, both companies dramatically increased the amounts in the pool. So I applied again using an updated form. We have not heard results on that yet, but I’m not holding my breath.

Immediately after information was available for PPP grants, I was on my computer working. The forms were not simple and required a lot of supporting documentation. It didn’t help there were PPP forms mixed with forms from the bank giving the loan. I applied through US Bank, because we have a personal account there.

At first US Bank kept me up to date via email, with new information daily. But when the money for the PPP program ran out, communication stopped. I could not get any information for six days. Let alone an email answered or person on the phone. That’s when I decided to use Pacific Western, a local bank with a branch in Claremont where the COURIER has held an account for decades.

Although they didn’t get out of the gate as quickly as other banks, they sent me a link to apply, even with the money drained from the program. I liked that. After applying again—yes, you can apply with different banks—we traded emails making sure all the paperwork was correct. Then I received something new…a phone call.

This was the first time I didn’t feel like a number. Here was a real person helping the COURIER prepare PPP paperwork so it was ready to file when the money became available.

Since then, the COURIER has received a $10,000 emergency loan from the SBA. This money will help a great deal, but it’s nowhere near having payroll covered for eight weeks. Now the COURIER staff waits, hoping our efforts in maintaining quality news coverage will help keep us in business. Sadly, we were forced to lay off two full time employees during this process, increasing the workload for remaining staff and leaving two big holes in the COURIER family.

Once again, I want to thank the community for all of your support. Your words of encouragement have a huge impact on staff morale, which we have to admit gets low at times. But we have a passion for keeping the public informed, especially when trusted information is needed more than ever. And, like all of you, we love Claremont. Stay safe out there.

 

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