The Federal Government has set aside $349 billion to help small businesses stay afloat as the economy remains partially shutdown due to coronavirus fears.
The Payroll Protection Program is part of the CARES Act stimulus package. It’s meant to fund small business operational costs like payroll and rent. The federal program, run through the Small Business Administration, went live Friday but many lenders across the country didn’t have online application portals ready.
"It was supposed to be up on Friday and it wasn't," Katharine Lobrecht explained. She is Finance Director at Best Bath, a Caldwell-based company that makes fiberglass showers and tubs.
"Then Saturday night they said it was, and Sunday morning I just kind of went in and they actually made it pretty easy," Lobrecht said.
Best Bath is still manufacturing, but orders have started to slow, she said. PPP funding is expected to prevent employee layoffs and furloughs as the workload shrinks.
"I got an email yesterday from the bank saying it's going to take two to three-and-a-half business days to process. You should be getting another email soon requesting all your supporting documentation. So we're still waiting on that," she said.
Banks are dealing with a huge number of applications, each needing an individual review. Idaho Central Credit Union said normally it receives about 25 applications a day from small businesses. For the first two days of the Payroll Protection Program, it received more than 1,000 requests. A spokeswoman confirmed by email they had distributed the first funds as part of the program Tuesday afternoon.
Troy Stang is President and CEO of the Northwest Credit Union Association, a lobbying organization working with banks in Idaho, Washington and Oregon.
"Realize your institution might be very busy working through each member's unique situation," he cautioned.
Stang said, in his 30 years working in banking and financial services, he's never seen a program stood up this fast with as much public support behind it.
"It feels like on the front end, the policy and the rules written around this program give much flexibility and diversity of how our small businesses are structured, and really there's a tool in there for almost anybody," he said.
The volume of application isn't the only issue that could delay funding. Lenders, especially smaller community banks and credit unions, may not have enough cash on hand to lend immediately.
"While the local institution[s] might have a short term crunch on doling out these dollars, their reimbursements should be coming in a fairly liquid manner as they submit that paperwork," Stang said. "We're talking about days here. We're not talking quarters and months."
Funding is distributed first-come, first-served, and is quickly being claimed. President Trump said Tuesday already $70 billion has been requested, 20% of the entire program in its first five days. Treasury Secretary Steven Mnuchin is asking congress to add an additional $250 billion to the program.
Follow Troy Oppie on Twitter @GoodBadOppie for more local news.
Copyright 2020 Boise State Public Radio
Member support is what makes local COVID-19 reporting possible. Support this coverage here.
