Many D.C. area small businesses and organizations began applying for Paycheck Protection Program (PPP) loans on Friday, despite much uncertainty and unanswered questions surrounding the application process.
PPP loans were announced after the federal government rolled out its CARES Act — the Coronavirus Aid, Relief, and Economic Security Act — which will pump $2 trillion into the American economy in an effort to mitigate the economic downturn caused by the COVID-19 pandemic. Of the relief funding, about $350 billion was designated for the Paycheck Protection Program, which promises to cover two months of employees’ paychecks.
Since applications opened up, SBA Administrator Jovita Carranza has been updating the world on acceptance rates via Twitter.
Latest #PaycheckProtectionProgram numbers: 17,503 loans valued at more than $5,400,000,000. @SBAgov + over 1,100 local lenders helping small businesses stay afloat with working capital to keep employees paid + doors open.
— Jovita Carranza, SBA (@SBAJovita) April 3, 2020
To get a local perspective on COVID-19 related federal funding application process, Technical.ly put a call out via email and social media, asking tech business leaders if they planned on applying for any government loans, especially PPP.
From what we heard, the program seems to be the most useful to #dctech companies and organizations, but above all, the general consensus is that there are many questions about timing and the lines on certain qualifications are still not clear.
On Friday, GSP Financial and Advisory cofounder Zack Giegel told Technical.ly that “the major banks are a major pain right now” when it comes to applying for COVID-related government loans. He said he felt like Bank of America was the only major financial institution working (though we saw elsewhere on the internet that not everyone felt the same). Meanwhile, Wells Fargo reported that it closed applications for PPP loans on late Sunday after receiving an influx of inquiries.
(Giegel also recently shared nine financial tips to keep your small biz afloat during a global crisis with Technical.ly readers.)
John Lettieri, cofounder of Chinatown-based Economic Innovation Group, shared a lengthy, but worthy, Twitter thread on confusion surrounding who has authority over the PPP — SBA or the U.S. Department of the Treasury.
NEW: We now have additional guidance and clarity from SBA and Treasury regarding the new Paycheck Protection Program, the federal government's big bet for keeping small businesses alive during the economic shutdown.
Spoiler: It's a mixed bag.
— John W Lettieri (@LettieriDC) April 1, 2020
His thread also points out some stipulations of the program.
This is going to add unwelcome new complexity — & yet another calculation formula — to an already difficult and complicated situation for business owners.
This is a big problem and, in part, a function of passing a program that is far too small to meet the scale of demand.
— John W Lettieri (@LettieriDC) April 1, 2020
Wharf-based startup OurStreets applied for a paycheck protection loan on Saturday with its business bank, BBVA USA, the company’s attorney and advisor Jonathan Fingeret told Technical.ly.
“We have not applied for any other assistance, and the PPP program is the one that seems to make the most sense for OurStreets,” said Fingeret.
Like many other banks, the financial institution began accepting application last week, specifically on Saturday, but BBVA reported that it has temporarily stopped accepting PPP loan applications due to the overwhelming response from its clients.
If the loan is granted, OurStreets plans to use the funds to continue to maintain its full payroll, which accounts for five employees total.
“From our perspective it was a shit show, there was a lot of conflicting information out there,” said OurStreets CEO Mark Sussman. “Without Jonathan, we wouldn’t have been able to get out application in on time.”
Byte Back CEO Elizabeth Lindsey shared that the tech inclusion nonprofit has applied for a PPP loan with plans to pay its rent and continue to pay full salaries to its employees through this uncertain time.
“Luckily Byte Back’s finance director, Isel Perez, is fabulous, so she spent late last week collecting all the documents and was able to submit our application this morning,” Lindsey said.
Byte Back banks with TD Bank and Lindsey said the organization has been getting real-time updates on the program from its banker there, John Tucker. TD Bank began processing PPP loan applications today. Lindsey also shared that this is the only federal funding opportunity Byte Back is applying to for COVID-related relief.
“Byte Back is lucky in that we have the resources to have strong financial controls and access to a banker who has supported us. Many small businesses don’t,” Lindsey said. “I think that the relief should be more direct and automatic. It’s stressful to have to go through these processes on top of all the other challenges right now.”
Have you applied for PPP or are you facing challenges applying? We want to hear the experiences of D.C. area small businesses — drop us a line at email@example.com.-30-
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