Friday, April 3, 2020
News 12 at 6 o'clock/NBC at 7
AUGUSTA, GA. (WRDW/WAGT) --The federal program to get help to small businesses shut down in the coronavirus pandemic is off to a rocky start. The Payment Protection Program launched today, but some local business owners are hitting roadblocks while trying to apply.
I-TEAM found that the lack of federal guidance is what's causing the banks to stall from lending.
And until the stalling ends, some owners, like Dean Durand of Custom Machine and Welding, plans to stay open and keep his machines running as long as he can.
“We are still operating," Durand said. “We are in the business that has to be there to support our customers but business is down from where it was in February.”
The Payment Protection program promises financial relief for small business owners and contract workers shut down by the coronavirus response to social distance. The federally guaranteed loan is supposed to cover employee salaries, rent, and utilities.
“For the 8 weeks, it’s forgiven and then anything you overstate you have to pay back at half a percentage interest over two years," Durand said.
It sounds good in theory, but Durand found out Thursday that he can't get the loan for now.
“We had an hour-long conference call with our banker and there was 40 small businesses on there," Durand said.
The process can be confusing for these small businesses needing the cash lifeline, especially since the federal government told them applications could start today. But the bank told Durand there is a critical fine print missing
“He even stated he wouldn’t do any loans for his customers until it was clear about the forgiveness the end of the eight weeks how was that going to work," Durand said.
“It’s not written out?" Liz Owens, I-TEAM reporter, asked.
“No it’s not clear what documentation you have to provide them to forgive it," Durand said.
Banks don’t want to proceed until they get direction from the Small Business Association. SBA serves as a sort of middle man between the business owners’ banks and the federal government.
“It’s going to be Monday before anything really gets done with it," Durand said.
Durand hopes that’s the longest he has to wait. In the meantime, he’s coming up with new ways to bring in business, like toilet paper roll shipping containers.
Some bankers are warning their customers that federal dollars could run out within 30 days once finalize each detail in the program. The program is a 'first come, first serve' operation so businesses are encouraged to contact banks to reserve a place in line for an application.
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