Small businesses shut out as SBA rescue loan program out of cash
Negotiations have stalled over adding money to the Paycheck Protection Program for small businesses. The program provides forgivable loans to small businesses that keep employees on their payroll, but it's out of money.
The $349 billion program was made available less than two weeks ago. Now, the Small Business Association says it's run out of cash.
The shortage is already causing problems for Vermonters. Our Dom Amato spoke with a small business owner in Essex Junction who was told she was accepted into the program, only to find out otherwise.
Laurie Lawless, who owns Dogs Rock Vermont, is trying to do what thousands of businesses are doing across Vermont-- keep their employees employed.
Lawless says things were looking up when she found out she was approved for the PPP loan, but her hopes were shattered when she found out there's no money left.
Lawless is a new small business owner in Vermont. Her doggy day care and training facility had its grand opening at the beginning of March.
"We had all of our classes full, and our day care program was moving in the direction where it would have been at full capacity," she said.
The coronavirus halted business. Clients got credits for classes and Lawless had to dip into emergency funds to keep her employees' jobs.
"We've taken a huge hit," Lawless said. "We had to cease our day care operations which is a big part of our income revenue."
She applied for the Paycheck Protection Program as soon as she could and has been waiting for the money for about two weeks.
Wednesday, she was told she was approved. She called the bank Thursday to find out the money was already gone.
"It's devastating," she said. "I told all of my employees yesterday I would be able to put them back at their normal hours and pay them."
Lawless understands the feds' role in helping the crisis but wishes Vermont state leaders could help, too.
"It's really our community here in Vermont that's being affected by this and I'd really love to see the state step up and do more for us," she said.
"We knew the program would run out pretty quickly," said Christopher D'Elia of the Vermont Bankers Association.
D'Elia says as of Monday, 4,886 Vermont applications submitted to the PPP program had been approved and $853.7 million out of about $350 billion has been committed to small businesses in Vermont. He says more applicants have come through and says it's up to the feds to offer more relief.
"This really rests with Congress right now," D'Elia said. "They've got to get it done and were hopeful they will."
There's a stalemate in Congress over a plan to add $250 billion to the Paycheck Program. Democrats, including Vermont's Rep. Peter Welch, want Republicans to agree to fund some other initiatives.
"Our hospitals are getting hammered. We need some more money to help our hospitals. Number two, our state budget is getting absolutely clobbered. Expenses are up, revenues have plunged and we would like to see more money to help our states. If we're going to get out of this, it's not just small business," said Welch, D-Vermont.
Welch says he hopes Democratic and Republican leaders can reach a compromise that will put support both business and government.