PHOENIX — Small business owners across Arizona are suffering.
They've been shut down by the coronavirus crisis.
Now many say they've been shut out of a multibillion-dollar federal loan program that's supposed to help keep them and their workers afloat.
“It’s been a longstanding dream slowly turning into a reality and now a nightmare,” said Matt Aronson, owner of the Schmear Bagelry in Queen Creek.
Aronson and his wife, Lindsay Aronson, say time is running out on them, their 14 employees, and their year-old bagel store. The next month could seal their fate.
The week-old Paycheck Protection Program, a $350 billion lifeboat Congress built to rescue small businesses, can’t keep up with the demand.
Matt Aronson has applied at five banks that handle the loans for the Small Business Administration. He’s heard back from one.
“Everyone is just overwhelmed,” he said, “and the infrastructure is just not in place.”
Lindsay Aronson added: “No one has any answers.”
It’s a common refrain. Larger banks – Wells Fargo and Bank of America, in particular – have been singled out as the least responsive.
Kimber Lanning, founder of Local First Arizona, ripped Wells Fargo by name at a news conference Tuesday with Gov. Doug Ducey. Lanning suggested small businesses might get a better response from smaller, Arizona-based lenders.
The Paycheck Protection Program lends money to businesses harmed by the coronavirus crisis. It covers 2.5 times a business’s monthly payroll. All of the loan could be forgiven
For Matt Aronson, a loan would mean, “we can keep the doors open, so I can keep my employees who have families and young children able to pay their rent and put food on the table.”
The PPP program’s response problems mirror issues faced by unemployment insurance offices – the staff and computer systems of both have been blitzed by calls from people in desperate need of help.
The loan pipeline might come unclogged in the next week as more businesses become eligible.
Meantime, Congress is haggling over whether to inject $250 billion more into the program.
Paul Hickman, president and chief executive of the Arizona Bankers Association, said in a statement:
"As of earlier today the SBA’s Paycheck Protection Program had obligated over $120 billion in loans to small businesses all over the country. Over 4,000 lenders are now participating in the program and have made over 450,000 loans.
"The problems the SBA encountered with their electronic access system for lenders earlier this week are being resolved. Additionally, I understand they are working with Amazon Web Services (AWS) to accommodate the expected surge of applications beginning (Friday) with the opening of the program to independent contractors and sole proprietorships.
“I commend all of the hardworking banking professionals who have worked so hard over the last several weeks to stand up and implement brand new systems to handle a grant program the magnitude of which we have never before seen in the United States for an economic recovery program.
“I also commend our government leadership for having the foresight to recognize that America’s banks could implement this type of recovery program with incredible dispatch and efficiency.”
The Arizona Small Business Association has a list of what you need to know: https://www.asba.com/page/covid19resources
The Arizona Commerce Authority has a resource guide that explains how to navigate the CARES Act: https://www.azcommerce.com/covid-19/financial-resources/
The U.S. Small Business Administration has resources for business owners to turn to: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources