The rollout of federal relief programs offered a much-needed source of funding and of hope to small businesses struggling in the coronavirus pandemic.
But securing the aid via the U.S. Small Business Administration’s Paycheck Protection Program and the Economic Injury Disaster Loan program has been easier said than done. Confusing federal guidelines, complicated applications and restrictions by SBA lenders on who they will underwrite loans for have created even more stress for small-business owners.
Marc Streisand, owner of Marc Allen Fine Clothiers, successfully turned in his Paycheck Protection Program loan application seeking upward of $100,000 when the program opened. But the days leading up to the moment when he handed the application to his BayCoast Bank representative, meeting up in a parking lot in the pouring rain, were incredibly demanding.
Streisand, a contributing columnist for Providence Business News, described hourslong phone calls with his accountant and controller as he worked to sort through the necessary documentation and fill out the 30-page application, a final version of which was not released until the night before the program went live.
“I think my beard got grayer that night,” Streisand said. “Everyone thinks businesspeople know all financial aspects, but I make clothes for a living. I don’t do accounting.”
‘If we don’t save ourselves, as small businesses, this economy is going to crash and burn.’
CHRISTOPHER BICHO, Landings Real Estate Group president
Anthony Mangiarelli, partner and director of the enterprise solutions group for Kahn, Litwin, Renza & Co. Ltd., agreed that even the most financially savvy business owner might not fully understand the federal guidelines. His team spent recent weeks reading and rereading legislation and federal documents to understand the “intent” of the policies as they help clients determine eligibility and prepare their applications.
But it’s not just technical help clients are turning to KLR for, either. Mangiarelli has also become an emotional support for his clients. He described panic-stricken phone calls, as well as those from business owners who are doing well and feel guilty for their success. Another client emailed with an “urgent” subject line, seeking guidance on what to do after learning that an employee who tested positive for COVID-19 had died.
“We are so much more than accounting right now,” Mangiarelli said. “It’s advisory, it’s consulting, HR, general advice.”
Edward Huttenhower, state director for the Rhode Island Small Business Development Center, an SBA partner that offers small-business services, also recounted the range of emotions expressed by business owners inundating his office with questions and concerns about the SBA loan programs, as well as their long-term recovery. In his 30 years with small-business development centers, he had never experienced something so prolonged and crippling to the small-business community.
Huttenhower admitted the rollout of SBA programs was imperfect – the initial platform for Economic Injury Disaster Loans in particular kept crashing and many early applicants were denied, which discouraged many small-business owners from seeking future help. But he encouraged applicants not to give up, noting that the SBA was working to get money into their hands as quickly as possible.
As of April 8, Rhode Island-based lenders had submitted “multiple thousands” of loan filings for the Paycheck Protection Program, totaling “hundreds of millions” of dollars, according to SBA Rhode Island Director Mark S. Hayward.
As of that same day, at least 20 of 23 members of the Rhode Island Bankers Association were accepting and processing applications for the emergency program, the association said.
Christopher Bicho, president of Landings Real Estate Group in Newport, said several of his company’s small-business tenants expressed frustration with the SBA process. Bicho, who submitted his Paycheck Protection Program application on the first day it opened, found the process easy thanks to expertise from his staff. He said he was in constant communication with a representative at Centreville Bank. But smaller businesses without the know-how or existing banking relationships were at a particular disadvantage, he said.
Still, Bicho was encouraging his tenants to apply for federal relief, even putting together a type of guide with frequently asked questions to help them through the process.
“Really, we all have an obligation to do this,” he said. “If we don’t save ourselves, as small businesses, this economy is going to crash and burn.”
Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.
