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For Marques Jones, the COVID-19 pandemic has presented a series of particularly trying challenges.
The business he owns – ComForCare Home Care in Henrico – provides care for high-risk seniors who still live independently inside of their own homes. So before the virus arrived, he invested money into protective gear that he never had needed to purchase previously. The added burden of spending money on items that were not in his budget – while still paying employees, along with losing 30 percent of his hourly clients within the first three weeks of the pandemic – left Jones reeling for help.
“This has been the most frustrating time of my life,” he said.
Easing the financial burden of small businesses like Jones’s was the goal of the federal Paycheck Protection Program, implemented earlier this month with $349 billion in initial loan funding from the U.S. Small Business Administration and replenished late last week by Congress with an additional $250 billion. But for those business owners who applied for a PPP loan, the uncertainty of when (or if) the funds will come through is causing more stress and frustration than relief.
Jones was at a loss as to where his business stood in the application process.
“It’s like filling out an application and just dropping it into a black hole,” he said. “You have no idea what is going to happen.”
Brei Stevenson, the executive director of Glen Allen Community Montessori School echoed that sentiment.
“Once we submitted our stuff there was radio silence. I followed up about a week later and was told they were working through the applications as quickly as possible. Meanwhile, I watched other business owners on social media share the same sentiments of confusion and fear of the unknown.”
Different banks, different structures
The process for which business owners apply for and receive their money seems to depend upon the bank through which they apply.
For instance, Atlantic Union (a bank with more than 25 Henrico locations) has accepted applications from any business, but prioritized those from existing customers. Officials from Truist Bank, formerly known as Suntrust, indicated that because of the volume of applications they received prior to the second round of funding, they will not be accepting any new applications for PPP. A message on the bank’s website displayed how tight the funding is compared with the demand.
“Given the extraordinary demand for PPP loans, not every qualified applicant will receive a loan under the PPP from Truist,” it reads.
Numerous attempts to reach banks in the area for details about loans they have already dispersed have not been returned.
Josh Rickey, the owner of Canine Adventure, a local pet care business that has operated in the area for 12 years, said that he was told to work with his current bank, BB&T (now Truist) to secure funding. But the bank will not accept his application, he said.
“We were told to work with our current bank in order to secure these federally funded loans, and each time I reached out to BB&T (Truist) to submit EIDL and PPP applications, they refused to take applications from me.”
The Small Business Administration has not released any locality-specific data about how much loan money was received by businesses. But it did indicate that $8.7 billion was dispersed to more than 40,000 Virginia businesses before the funding dried up.
The National Federation of Independent Businesses surveyed its members nationally and found that while about 75 percent of them small business owners submitted a PPP loan application, about 80 percent of that group has yet to receive any money.
Those numbers are very discouraging to Holly Wade, the director of policy and analysis for NFIB.
“Small businesses were prepared and ready to apply for these programs, the only financial support options for most, and it is very frustrating that the majority of these true small businesses haven’t received their loan yet,” she said.
‘It felt like we all blindly spun a wheel’
Business owners should reach out to their banks directly for more information, according to Bruce Whitehurst, the president and CEO of Innsbrook-based Virginia Bankers Association.
“If they have a relationship with a commercial banker, reach out to that banker,” he said. “That is always the first thing to do. If they don’t have that type of relationship, then go to the bank’s website and see what that bank has posted about PPP and the application process.”
While large national chain banks are being sued for prioritizing larger business loan applications, smaller local banks have been receiving national praise for working with business owners. Stevenson credited her bank, which is based in Chesterfield County but has branches in Henrico and elsewhere in the region, for aiding her with the application process that eventually led to her non-profit receiving the PPP funding.
“Village Bank was great through the process,” she said. “In a way, listening to others' experiences with their banks, it felt like we all blindly spun a wheel and some of us landed on the luck of being with a great local bank, while others had to fight and worry more.”
PPP is the most lucrative funding option for small businesses to try and stay afloat, but other options still remain for small business owners.
In addition to applying for PPP funding, Whitehurst also recommended that business owners apply for the Economic Injury Disaster Loan, which can provide a loan of up to $10,000 to businesses. The requirements are the same and apply to businesses with less than 500 employees. EIDL funds are supposed to be made available to businesses within days of successfully applying with no requirement to repay the loan.
The funding for EIDL was depleted at the same time as PPP, but the bill passed by Congress last week to replenish the latter also included $60 billion more for the former.
After the bill’s passage in the House of Representatives, Congresswoman Abigail Spanberger of Henrico (D-7th District) explained why she and nearly the entire House supported it.
“Today, the House responded to this urgent need by passing robust funding for the PPP and EIDL programs, so that small businesses and their employees can protect their livelihoods, put food on the table, and weather this financial downturn,” she said.
President Trump signed the bill on Friday as the final step needed for the SBA to reopen the application process through banks.
Whitehurst applauded the bill in a statement.
“This legislation will allow Virginia banks to quickly deliver additional relief to as many small businesses as possible, saving jobs and limiting the economic damage from COVID-19,” he said.
‘A long road to recovery’
Treasury Secretary Steven T. Mnuchin and Small Business Administration Administrator Jovita Carranza issued a press release on Friday afternoon saying that the SBA will resume accepting applications today at 10:30 a.m.
“The PPP has supported more than 1.66 million small businesses and protected over 30 million jobs for hard working Americans,” they wrote. “With the additional funds appropriated by Congress, tens of millions of additional workers will benefit from this critical relief.”
The latest round of funding gives hope to small business owners desperately seeking the funding, but without more specific data from the SBA and banks, it still remains unclear how much funding has, and will make its way to the businesses in this community.
For Marques Jones, the waiting game and the mystery surrounding his application status left him at the point of giving up on receiving the assistance. But at 9 p.m. the night before the announcement was made that the first round of PPP funding was completely empty, he received the money to save his business – at least for the next few weeks.
But for the majority of owners like Josh Rickey, the fate of their businesses is is still up in the air. Rickey is not expecting Canine Adventure to receive any aid from the government at this point, he said.
“Canine Adventure is selling a custom round of t-shirts to help us get through the lean times ahead,” Rickey said. “It's going to be a long road to recovery for the small businesses that do survive COVID-19.”
