Small business owners across Connecticut are filling out forms, submitting paperwork and keeping their fingers crossed that they can get a slice of $349 billion being released by the federal government to support struggling companies.
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The clamor for help from the Small Business Administration’s Paycheck Protection Program has been so great that Congress is considering appropriating an additional $250 billion to replenish the fund.
Last week’s rollout of the cash was supposed to get funds into the hands of company owners as fast as possible, to allow them to retain employees. But it hasn’t gone entirely smoothly.
And some of the glitches might be due purely to demand.
“All week we’ve been working with business owners, and preparing them with what documentation they might need, if they qualify, the requirements of the program, and so they’ve been able to collect some of that information and apply,” said Dana Clark, the vice president of lending at Nutmeg State Financial Credit Union.
She said, in the week ahead of last Friday’s launch, her institution alone had more than 100 inquiries, a number she describes as “vastly higher” than anything they would normally see.
Nutmeg is just one of around 70 SBA lenders participating in the state of Connecticut.
“Our branch traffic we’ve limited to drive through only, so some of our retail staff are now pitching in and we’ve cross-trained them so that we can be prepared to handle the volume,” she said.
One of Nutmeg’s customers is Ignite Fitness in West Hartford. The gym and personal training business has retained its employees for now -- they’ve been able to move classes online via video conferencing. But owner Alex Boscarino said, as the crisis drags on, it’s hard to know whether their customers will have the discretionary cash to keep doing that weekly session.
“Currently we are keeping everyone fully staffed, and we want to keep it that way,” he said.
He’s applied for a PPP loan, and he says it makes sense to be working with a familiar financial institution as a guide through the confusing back-and-forth over documentation in the hastily-prepared program.
“It’s almost like the answers weren’t all out there,” he said. “Which makes me even more grateful for having Nutmeg who I’m working with. Because they’re kind of there with me the whole way with a lot of open dialogue of, ‘Hey you know what? Actually those documents might not suffice, but if you can provide this, this’ll be good.’”
He said he feels the urgency of the limited funds which SBA says will be apportioned on a first-come first-serve basis.
“The quicker you move the better, right?” he said.
Phil Barnett runs the Hartford Restaurant Group, which owns the Wood-n-Tap chain in Greater Hartford. He’s applied, but he said he’s still unclear if he’ll be able to comply with the requirement to bring employees back onto the books. If businesses accomplish that, the majority of the loan converts to a grant.
“It’s been a little bit of whirlwind, if you would,” he said. “Unfortunately with the state shutting us down, we can’t re-open. We’d love to bring our workers back, that’s the ultimate goal.”
Mark Hayward is the interim regional director for the SBA in Connecticut.
“Even if you get the loan and you’re not operational, the theory is to bring your employees back, put them on your payroll even though they’re not working and pay them,” he explained. “Because when you become operational, you want them as employees - you don’t want them on the unemployment line.”
U.S. Sen. Chris Murphy said the issues of the last few days reinforce his initial view that the aid would have been better structured as grants administered by the federal government, and not loans funneled through financial institutions.
“We’ve heard initial reports that some private lenders are giving preference to their existing customers, some might be playing favorites,” he said. “That’s troubling, disturbing - something we have to fix.”
“There’s not a playbook, there really is no analogue on when this is going to end,” said David Lehman, Connecticut’s commissioner of the Department of Economic and Community Development. He acknowledged the rocky start to the rollout, but said businesses should persist.
“It’s a very significant amount of stimulus from the federal government,” he said. “We’re strongly encouraging all businesses to apply.”
By Monday, 1,299 loans had been approved in Connecticut by SBA participating banks, totaling $643 million. No updated figures were released Tuesday.