Last week, 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 coronavirus pandemic.
Part of the Act, a loan program called the Paycheck Protection Program (PPP) has piqued the interest of small businesses across the country as an option to bridge financing through the end of the pandemic, when the U.S. economy is expected to swing back up.
The plan includes $349 billion set aside for small business loans intended to cover payroll. Its goal is to help small businesses (500 employees or fewer) stay afloat and keep their people employed through the duration of the pandemic.
Technical.ly asked some folks in Philly’s startup and business community how they were feeling about the government loans, and if they were planning on applying for the Paycheck Protection Program. While many are considering multiple loan options — government or otherwise — the general consensus is that these programs are being rolled out fast and there are questions about timing, who’s qualified and how long it could take to get the funds.
We saw some biz leaders lament on social media that programs they intended to apply for are closing up or seeing higher demand than they expected.
Today they told me they didn’t get the application in on time.
Who is the aid going to?
— Dave Becker (@Dave_Becker_) April 3, 2020
As of 1 p.m. Friday, the Small Business Association (SBA) for the Mid-Atlantic region said nearly 4,000 applications had been submitted for PPP loans, totaling $1.4 billion so far.
— SBA Mid-Atlantic (@SBAmidatlantic) April 3, 2020
A handful were rushing to their banks to apply, only to find out the bank wasn’t yet ready to give out the loans (many of which only received instructions yesterday).
Trying, but failing. Wells Fargo is not processing them yet, says to just keep checking back to their website. Other banks are will only process for existing customers. We're told $ is first come first serve. It's a mess.
— Clover Market (@clovermarket) April 3, 2020
Rui Jing Jiang, CEO of Avisi Technologies, makers of a medical device to treat glaucoma, told Technical.ly earlier this week that her company was anticipating the rollout of the CARES Act PPP loan and intended to apply for it.
“I am sure maintaining runway and covering payroll for as long as possible is top of everyones’ minds right now, and I hope there will be smooth, rapid implementation of this much needed assistance,” she said.
On Friday, Jiang said she has high hopes once the program gets off the ground, although many banks haven’t yet caught up and made applications available as of Friday.
“This is understandable given the fact that they are taking on risk that should be better defined,” she wrote in an email. “Overall, I have high hopes for the program once it gets rolling. Assistance like this in times like this is essential to keep small businesses running, productive, and able to serve as the backbone of the U.S. economy.”
Adit Gupta, CEO of Vyb, a business reviewing app, said the company is applying “to everything” including the PPP loan and SBA disaster relief loans. He noted that some companies like Google and Facebook are rolling out grant programs that his team is keeping their eye on.
Traditionally, the company has benefited from programs like incubators and accelerators, and organizations like PACT’s workshops, Gupta said. Right now, many companies are having to figure these programs out on a much quicker timeline.
“It’s certainly complicated. It’s a lot of paperwork — and the systems are slow,” he wrote in an email. “However, most of these things are at a first come first serve so it makes it time sensitive.”
— Melissa Lee (@me1issalee) April 3, 2020
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