Hiring Hoosiers: $349B effort to help United States small businesses launches Friday

Old Town Saginaw businesses

Old Town Saginaw businesses

Small businesses and sole proprietorships can apply for a loan through the Paycheck Protection Program starting Friday (April 3).

Mnuchin announced at the briefing that the SBA would bump up to 1% the interest rate lenders may charge small businesses under the relief program after lenders complained that the previous rate of 0.5% was below their own cost of funds.

"There's a sense of urgency that there's not actually enough money in the loan fund for the number of people who actually are desperately in need of help right now", said Amanda Ballantyne, executive director of Main Street Alliance, an advocacy group for small businesses.

Still, some did succeed in at least getting the process started. Bank of America alone said 75,000 small businesses had applied for $7 billion of loans.

Advocates for lenders and small businesses also expressed concern on the eve of the program's launch that distributing the money will take far longer than the same-day processing promised early on by the Trump administration.

How much can a business request?

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The program is part of the $2 trillion relief package signed into law last week, which was billed as a way to help local businesses that often form the fabric of communities stay afloat.

But lenders were still waiting for guidance - which only arrived Thursday night - on what documentation they needed from borrowers and other guidelines to process the loans, said Julie Huston, chief executive of lender Immito LLC in Denver and chairwoman of The National Association of Government Guaranteed Lenders, a trade association of banks and finance companies that make SBA loans.

For customers, that led to exchanges that ranged from the frustrating to the almost ridiculous. She said she has used "every penny of reserves" to retain her 125 employees even as one restaurant has been ordered closed and the others are doing limited business.

"It's gonna take a little bit of time, but we have committed that this will be available tomorrow", he said. "The clock is ticking".

Eastern Bank has established an online portal for business owners to submit their relevant information. On Friday, a bank representative told Stein he was unaware that the form was on its website.

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"It was nearly comical, but heartbreaking. It's tragicomedy, I guess", he said.

Even those banks accepting applications were limiting them to current customers.

White House economic adviser Larry Kudlow said on Bloomberg TV that banks are "ready to go" with the loan programme. Small businesses can apply for loans up to $2 million, with an advance of up to $10,000.

Businesses with more than 500 employees may still qualify if they meet the SBA's size standards for specific industries. Fifty of the businesses said they were less than a month from permanently shutting down, and two-thirds said they were three to six months away from a permanent shutdown. "But our businesses in MA, many of them are hurting".

The pool of customers has expended beyond the regular pool of for-profit companies.

"The breadth of the program and the speed to the market is so quick, you've got to understand that's expected", Parent said. That could mean applicants who have the financial and legal expertise of a larger organization might be able to maximize their benefits, not leaving much for smaller businesses, especially those who wait or have problems applying. SBA serves as a sort of middle man between the business owners' banks and the federal government. Banks across the area are now bracing to process hundreds, if not thousands, of applications.

"Small business owners have had their applications filled out".

"They say this program will start on Friday, but we have serious doubts that it will", said Sam Taussig of online lender Kabbage Inc., which applied on Tuesday.

Treasury Secretary Steven Mnuchin tweeted his congratulations to the Small Business Administration (SBA) and Treasury early Friday morning. There is plenty of time. Gideon, owner of Incendio International, a San Francisco-based public relations firm, was frustrated and concerned after a day of phone calls and futile website visits.

"It's going to be Monday before anything really gets done with it", Durand said. Ken Sweet and Joyce Rosenberg reported from NY.

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