Loan money runs out as small business owners line up
Foreign companies and even large restaurant chains – which successfully lobbied for a waiver of a rule limiting the program to companies with 500 or fewer employees – succeeded in obtaining loans, showing the uneven way in which the program was implemented.
Today in business
Potbelly Sandwich Shop, a chain of 400 restaurants, revealed in a filing that it raised $ 10 million under the JPMorgan Chase program. Wave Life Sciences, a Singapore-incorporated biotechnology company, has secured $ 7.2 million from the program, according to a filing. A spokesperson for the company, Alicia Suter, said the pandemic “makes it difficult to predict or plan the potential impacts on current and planned business activities and operations.” She said 97 percent of the company’s workforce is based in the United States.
Of course, hundreds of thousands of borrowers have been approved or given assistance under the so-called Paycheck Protection Program, which aimed to provide small business loans that would be canceled if used. to pay employees, rent or mortgage capital. Federal officials tried to get the aid operation started as quickly as possible, knowing that small businesses were under extreme pressure and could disappear if the deployment was slow.
But it created confusion.
Hari Singh, the owner of CrossFit NYC, which owns two gyms in Manhattan that together cost $ 100,000 in monthly rent, believed he was doing whatever it takes to get help with the program. On March 28, five days before its official launch, he asked his banker at his Citigroup branch, where he had been a client for 40 years, how to apply. The banker initially appeared not to know the details of the program, Singh said, but later assured him that as soon as Citi started accepting applications, his would be considered.
Mr. Singh calculated he needed at least $ 200,000 from the program to pay rent and the employees he had not laid off when New York City ordered all non-essential businesses closed. He showed up to the bank every day and was told to wait every day.
“It hasn’t been 24 hours since I emailed or texted someone at Citibank,” Singh said. While he was waiting, he studied the loan program and considered applying to other banks. He attended a webinar hosted by Newsday, in which a representative from the Small Business Administration warned homeowners not to file two loan applications at a time.