From 'Nightmare' To 'Surprisingly Seamless' - Small Business Owners Describe COVID-19 Bailout Experiences

The Trump administration's $350 billion SBA Paycheck Protection Program was launched on Friday as part of the $2 trillion bailout package, letting small businesses gain access to capital for payroll and other overhead costs.

As we reported on Friday, the rollout went horribly awry for some - with banks such as BofA requiring an existing credit line to qualify, surprising many. JPM delayed the rollout until 1pm, while Wells Fargo and others completely dropped the ball.

That said, it wasn't all bad on Friday - with some business owners such as small business owner Kyle Stewart, who told Bloomberg that the process was "surprisingly seamless" when he applied for a loan to keep his batting-cage and baseball training business afloat.

After spending two hours gathering the payroll and business information required and completing the Paycheck Protection Program application Thursday night, Kyle found uploading the form to the bank’s portal Friday morning was “surprisingly seamless” and automated.

After San Francisco announced a shelter-in-place order on March 16, Stewart told his five hourly workers he wouldn’t be able to pay them going forward. The timing couldn’t have been worse, as his company makes 60% of its profit in the month of March ahead of the baseball season. He’s hoping the loan will help keep them on until the business is able to reopen. -Bloomberg

"We are still stuck on second base with 2 outs in the ninth inning," said Stewart. "Here is to hoping for a clutch hit from the Feds."

Cute.

Others, such as Ohio hair salon owner Clara Osterhage found the process to be a "nightmare." After gathering documents in preparation to be one of the first in line with her application on Friday, she was told by her small regional bank at 11 a.m. that they weren't going to be able to submit applications that day, and that 'even big banks weren't able to do it.'

"This is a nightmare," she said, adding that she doesn't have a clue when she'll gain access to the funds she needs.

"How do I feel? Uncertain with a capital ‘U.'"

Goat's milk soap maker Theresa Richard of Arnaudville, Louisiana was "at a loss" after trying to obtain a loan for her Youngsville store, Bain Amour Bath & Body Co., which has been shut since the state's March 22 stay-at-home order, which has left her lone employee without work.

Richard's local bank, Farmers and Merchants Bank & Trust Co. of Beaux Bridge told her they're still waiting on more information about the program. Her other bank, Chase, sent her an email notifying her that they wouldn't be ready for the program's Friday morning launch.

"Nobody has a real clear idea of what they need in place to start doing the loans," she said.

Community bankers are “rightfully frustrated and, in many cases, livid” after promised online portals never went live on Friday, said Rebeca Romero Rainey, chief executive officer of Independent Community Bankers of America.

It was “a nightmare situation,” Rainey said. “Media reports continue to indicate successful launches through the country by community banks, few of which we have been able to confirm.” -Bloomberg

Robin Schultz, who operates Birmingham, Alabama commercial lighting company Quality Electric, says that despite using the same lender for over two decades that she was surprised to receive an email from them Thursday night notifying her that it hadn't received guidelines from the feds.

After trying to apply at 4 a.m. Friday morning, she received an email around noon to let her know that the site was operational. Moments later, it was down, and she still wasn't able to file paperwork for the loan.

More tales of woe and optimism (via Bloomberg):

‘Eight Weeks Is Ten Years’

Erik Bruun owns SoCo Creamery, an ice cream shop and wholesale supplier in Great Barrington, Massachusetts. Foot traffic into his store is slower this time of the year, but is down 60% from where it typically is.

Wholesale ice cream sales, which make up the majority of revenue during the off-season, have completely stopped.

Bruun applied for an emergency loan last week but has yet to hear back. He tried to apply to the paycheck protection program as well, but his local bank told him the application changed and he’d have to wait until they receive instructions to proceed.

The application made it sound like the money would be dispersed in 72 hours. Time is critical right now, and even if his paycheck protection application is approved he’s not sure if the duration will be enough.

“Eight weeks? Eight weeks is ten years right now,” he said. “Eight weeks ago we lived in the allegedly good times. Now we live in the Great Depression.”

One small perk with the lockdown: as people hunker down, pint sales in local grocery stores are up.

‘So Much Confusion’

Wahid Nassar, who runs a restaurant in Highlands, New Jersey, tried going online Friday morning to apply for the loan through his lender, Bank of America, but repeatedly got error messages.

“There’s so much confusion and hard to get a straight answer from anyone right now,” he said.

‘Bringing Hope’

At 9:30 a.m. Friday, the paperwork, so utterly confusing at times, was finally in order for Jason Maxwell. The CEO of MassPay, a payroll and human resources firm that employs 59 people in Beverly, Massachusetts, faxed his application for an SBA loan to his banker in nearby Salem.

Late Thursday, Maxwell was told the federal loan program had tweaked its application. Luckily, Maxwell has a good relationship with his banker, Ed Lomasney, a senior vice president at Salem Five Bank. Lomasney contacted Maxwell, who immediately filled out the new form.

Maxwell has worked with Lomasney for seven years, even switching lenders when the banker relocated to a new financial-services institution three years ago.

“He’s the kind of guy who would knock down doors for us,” Maxwell said of his financial guru, who was too busy Friday with applications to comment.

Maxwell has also been helping other business owners navigate the programs and loans available. He called the owner of his favorite coffee shop, who is not a client, when he heard the man was feeling utterly hopeless, and offered information and advice on how to get some relief.

The programs “are bringing hope to a pretty grim situation,” Maxwell said.

‘Somewhat Optimistic’

Steve Vernetti, owner of Vernetti, an Italian restaurant in Los Angeles that’s a favorite of Mayor Eric Garcetti, said he had to fill out multiple applications because they kept changing, including as recently as Friday morning.

“It seems like the program is being fleshed out in real-time,” Vernetti said.

Vernetti said his business manager has a close relationship with his bank that’s keeping them in the loop, and that “I can only imagine what the confusion is like for those who don’t have the advantages we have.”

The restaurant owner said he’s been paying his 20 employees for two weeks out of his own pocket but won’t be able to continue. If he gets some confirmation of the SBA funding, he’ll consider opening for pickup and delivery services in two weeks.

“I am starting to see a way through this, and I am feeling somewhat optimistic,” Vernetti said.

Let's see what next week brings in the land of struggling business loans...