Small Businesses Left In The Lurch
The government’s Paycheck Protection Program (PPP) loans to assist small businesses through the coronavirus pandemic have been a lifesaver for business owners and employees across the country.
Due to the speed at which the program was developed, there were bound to be hiccups in the process - some small businesses were left in the dust without any assistance as a result.
Many small businesses spoke out when they realized that larger companies had their loans approved and disbursed faster. An analysis of the Small Business Administration’s $659 billion PPP showed that almost one third of the loans approved in the first week ranged from $150,000 to $10 million. The reasoning behind the priority treatment being given to bigger businesses was their connection to major banks, which sped up the process. Smaller businesses didn’t have the prior connection that ensured authenticity.
The issues continued for small businesses when they were denied loans due to honest mistakes and clerical errors. As expected, many mom and pop shops could not hire accountants and their tiny mistakes - like putting a decimal in the wrong place - caused them to be automatically denied a PPP loan. Although many of them appealed the state’s decision, they were rejected again and told that individual revisions to expected revenue were not allowed.
While it may be too late for some small businesses, there are resources for those still struggling. Towns, cities and companies have compiled lists to help businesses searching for answers and for assistance: the state government page lists resources including grants and loans. Cambridge has a page of webinars. C.I.C. lists loans and grants that are available for Massachusetts small businesses. The Boston Business Journal goes in depth on the state and local level.
Hopefully, Washington can quickly come to agreement on the terms of the next round of assistance and get much needed PPP loans into the hands of the small businesses that desperately need them to stay afloat and weather this seemingly endless storm.