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Small Businesses Wait for Cash as Disaster Loan Program Unravels Small Businesses Wait for Cash as Disaster Loan Program Unravels
(8 days later)
Flooded by requests for help like never before, a federal disaster loan program that was supposed to deliver emergency relief to small businesses in just three days has run low on funding and nearly frozen up entirely. Now, business owners who applied are desperate for cash and answers about what aid, if any, they are going to receive.Flooded by requests for help like never before, a federal disaster loan program that was supposed to deliver emergency relief to small businesses in just three days has run low on funding and nearly frozen up entirely. Now, business owners who applied are desperate for cash and answers about what aid, if any, they are going to receive.
The initiative, known as the Economic Injury Disaster Loan program, is an expansion of an emergency system run by the Small Business Administration that has for years helped companies after natural disasters like hurricanes, floods and tornadoes. To speed billions of dollars in aid along, the government directly funds the loans, sparing applicants the step of finding a lender willing to work with them.The initiative, known as the Economic Injury Disaster Loan program, is an expansion of an emergency system run by the Small Business Administration that has for years helped companies after natural disasters like hurricanes, floods and tornadoes. To speed billions of dollars in aid along, the government directly funds the loans, sparing applicants the step of finding a lender willing to work with them.
But in the face of the pandemic, the loan program is drowning in requests. Many applicants have waited weeks for approval, with little to no information about where they stand, and others are being told they’ll get a fraction of what they expected.But in the face of the pandemic, the loan program is drowning in requests. Many applicants have waited weeks for approval, with little to no information about where they stand, and others are being told they’ll get a fraction of what they expected.
The program is supposed to offer loans of up to $2 million, but many recent applicants said the S.B.A. help line had told them that loans would be capped at $15,000 per borrower. That was backed up by a message from the agency that one applicant shared with The New York Times.The program is supposed to offer loans of up to $2 million, but many recent applicants said the S.B.A. help line had told them that loans would be capped at $15,000 per borrower. That was backed up by a message from the agency that one applicant shared with The New York Times.
The CARES Act, the $2 trillion relief bill signed by President Trump last month, also authorized the S.B.A. to hand out the first $10,000 as a grant that didn’t have to be paid back. Those funds were supposed to be available to applicants within three days of their application, even if they weren’t approved for a loan. That hasn’t happened, according to more than 400 applicants who contacted The Times.The CARES Act, the $2 trillion relief bill signed by President Trump last month, also authorized the S.B.A. to hand out the first $10,000 as a grant that didn’t have to be paid back. Those funds were supposed to be available to applicants within three days of their application, even if they weren’t approved for a loan. That hasn’t happened, according to more than 400 applicants who contacted The Times.
S.B.A. officials did not respond to repeated requests for comment.S.B.A. officials did not respond to repeated requests for comment.
“I’m afraid I won’t see a penny,” said Virginia Warnken Kelsey, an opera singer in Branford, Conn., who applied on March 29 and had not received a response as of Thursday.“I’m afraid I won’t see a penny,” said Virginia Warnken Kelsey, an opera singer in Branford, Conn., who applied on March 29 and had not received a response as of Thursday.
Ms. Kelsey had a busy spring season planned, with a tour scheduled to stop in Belgium and the Netherlands and performances with orchestras in Oregon and North Carolina. Everything has been canceled. The section of her website where she posts her engagements simply reads: “No upcoming events.” For her, the loan would be a lifeline of cash to cover her rent and other bills.Ms. Kelsey had a busy spring season planned, with a tour scheduled to stop in Belgium and the Netherlands and performances with orchestras in Oregon and North Carolina. Everything has been canceled. The section of her website where she posts her engagements simply reads: “No upcoming events.” For her, the loan would be a lifeline of cash to cover her rent and other bills.
The disaster loan program’s missteps have been overshadowed by the chaotic start of the federal government’s other large small-business aid effort, the Paycheck Protection Program, which started taking applications last week. Applicants to that initiative have faced delays as banks deal with the hasty deployment of a $349 billion program.The disaster loan program’s missteps have been overshadowed by the chaotic start of the federal government’s other large small-business aid effort, the Paycheck Protection Program, which started taking applications last week. Applicants to that initiative have faced delays as banks deal with the hasty deployment of a $349 billion program.
Disaster loan applicants — many business owners are seeking relief through both — have also had to wait, even though the program predates the crisis. The S.B.A. began taking applications in mid-March, but its rollout was piecemeal. Each state had to submit its own formal disaster declaration, and business owners could not apply until their state’s declaration was approved. It took around two weeks for all 50 states to become eligible.Disaster loan applicants — many business owners are seeking relief through both — have also had to wait, even though the program predates the crisis. The S.B.A. began taking applications in mid-March, but its rollout was piecemeal. Each state had to submit its own formal disaster declaration, and business owners could not apply until their state’s declaration was approved. It took around two weeks for all 50 states to become eligible.
And even though Congress allocated billions of dollars to fund the disaster loan program, some applicants said S.B.A. representatives had told them that funding was running out.And even though Congress allocated billions of dollars to fund the disaster loan program, some applicants said S.B.A. representatives had told them that funding was running out.
Deb Wood-Schade, who runs a chiropractic wellness business in Aliso Viejo, Calif., applied in mid-March and was told by phone on Saturday that she had been approved for a loan of nearly $25,000 — enough to cover six months of her operating expenses. But loan documents she received on Wednesday suggested that amount had been cut to $8,300, covering just two months of her costs.Deb Wood-Schade, who runs a chiropractic wellness business in Aliso Viejo, Calif., applied in mid-March and was told by phone on Saturday that she had been approved for a loan of nearly $25,000 — enough to cover six months of her operating expenses. But loan documents she received on Wednesday suggested that amount had been cut to $8,300, covering just two months of her costs.
“Is that all I can get?” asked Ms. Wood-Schade, who emailed that question to her S.B.A. loan officer but had not heard back. “I am concerned if I take it I won’t get the additional funds.”“Is that all I can get?” asked Ms. Wood-Schade, who emailed that question to her S.B.A. loan officer but had not heard back. “I am concerned if I take it I won’t get the additional funds.”
Senator Ben Cardin, Democrat of Maryland, who pushed for the additional funding through the CARES Act, said the program simply had to have more money.Senator Ben Cardin, Democrat of Maryland, who pushed for the additional funding through the CARES Act, said the program simply had to have more money.
“The fact that S.B.A. is limiting Economic Injury Disaster Loans to an initial disbursement of $15,000 shows that there is a clear need for more resources for this program,” he said.“The fact that S.B.A. is limiting Economic Injury Disaster Loans to an initial disbursement of $15,000 shows that there is a clear need for more resources for this program,” he said.
The loan program was never designed to handle a disaster of this magnitude — one that has sent unemployment claims soaring and forced businesses to close.The loan program was never designed to handle a disaster of this magnitude — one that has sent unemployment claims soaring and forced businesses to close.
The program’s previous peak came in 2006 after Hurricane Katrina. It disbursed loans of $1.7 billion that year, according to the Congressional Research Service. In early March, Congress allocated funds to support around $7 billion in lending in response to the pandemic. It added another $10 billion through the CARES Act to fund the $10,000 cash grants, saying applicants could get that money even if their applications were denied.The program’s previous peak came in 2006 after Hurricane Katrina. It disbursed loans of $1.7 billion that year, according to the Congressional Research Service. In early March, Congress allocated funds to support around $7 billion in lending in response to the pandemic. It added another $10 billion through the CARES Act to fund the $10,000 cash grants, saying applicants could get that money even if their applications were denied.
But the demand has been extraordinary.But the demand has been extraordinary.
If every applicant received the maximum $10,000 grant, the funding would cover around one million businesses. But more than three million applied for disaster loans last week alone, Joseph Amato, the director of the S.B.A.’s Nevada office, told attendees at a webinar on Monday. His comments were reported earlier by The Washington Post.If every applicant received the maximum $10,000 grant, the funding would cover around one million businesses. But more than three million applied for disaster loans last week alone, Joseph Amato, the director of the S.B.A.’s Nevada office, told attendees at a webinar on Monday. His comments were reported earlier by The Washington Post.
In response to the demand, the S.B.A. appears to have also added an additional restriction on the grants: Dozens of business owners said they had been told that the grant, if they got it, would be limited to $1,000 per employee — meaning the smallest businesses could not receive the full amount.In response to the demand, the S.B.A. appears to have also added an additional restriction on the grants: Dozens of business owners said they had been told that the grant, if they got it, would be limited to $1,000 per employee — meaning the smallest businesses could not receive the full amount.
Updated July 7, 2020
The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles.
A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.
The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.
The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
Even early applicants who have been approved for larger loans still have unanswered questions.Even early applicants who have been approved for larger loans still have unanswered questions.
Abninder Mundra, who owns a franchise of the UPS Store in Portola Valley, Calif., applied for a loan on March 20 and was approved four days later for $210,000. He finally received and signed his closing documents this week. He was still waiting for the cash to arrive — and for details about how the $10,000 grant would work.Abninder Mundra, who owns a franchise of the UPS Store in Portola Valley, Calif., applied for a loan on March 20 and was approved four days later for $210,000. He finally received and signed his closing documents this week. He was still waiting for the cash to arrive — and for details about how the $10,000 grant would work.
A retail business owner in California, who spoke on the condition of anonymity because he feared jeopardizing the loan he had been promised, was relieved to be getting the money needed to support his employees, but frustrated about the process.A retail business owner in California, who spoke on the condition of anonymity because he feared jeopardizing the loan he had been promised, was relieved to be getting the money needed to support his employees, but frustrated about the process.
He sought a loan on March 17, right after his state became eligible. In late March, he received a call from an S.B.A. official who requested additional documents, then verbally approved a loan of $500,000. It took more than a week before he got a letter confirming the loan, along with a pile of closing documents to sign.He sought a loan on March 17, right after his state became eligible. In late March, he received a call from an S.B.A. official who requested additional documents, then verbally approved a loan of $500,000. It took more than a week before he got a letter confirming the loan, along with a pile of closing documents to sign.
Business owners who applied later are afraid the funding will run out before their applications are processed.Business owners who applied later are afraid the funding will run out before their applications are processed.
A loan capped at $15,000 would be nearly useless to Kevin Smith, the founder of Wynexa, a software company in Houston. Mr. Smith, who applied for a loan in late March, is seeking at least $50,000 to keep his company and his three employees afloat.A loan capped at $15,000 would be nearly useless to Kevin Smith, the founder of Wynexa, a software company in Houston. Mr. Smith, who applied for a loan in late March, is seeking at least $50,000 to keep his company and his three employees afloat.
He has called the S.B.A. for updates three times, waiting on hold each time for up to two hours.He has called the S.B.A. for updates three times, waiting on hold each time for up to two hours.
“Each time I’ve called it’s been a different story,” Mr. Smith said. He was initially told he would have a response to his application by April 1. When that date passed and he called again, he was told it would take at least two weeks. Now, the S.B.A. is not offering any estimates at all, he said.“Each time I’ve called it’s been a different story,” Mr. Smith said. He was initially told he would have a response to his application by April 1. When that date passed and he called again, he was told it would take at least two weeks. Now, the S.B.A. is not offering any estimates at all, he said.
Several business owners said their frustration was magnified by the Trump administration’s frequent proclamations that small business aid was flowing freely. “Any little glitch, we had worked out within minutes, within hours,” Mr. Trump said on Tuesday about problems with the government’s still-chaotic paycheck loan program.Several business owners said their frustration was magnified by the Trump administration’s frequent proclamations that small business aid was flowing freely. “Any little glitch, we had worked out within minutes, within hours,” Mr. Trump said on Tuesday about problems with the government’s still-chaotic paycheck loan program.
Dave Vanslette, who has applied for that program and a disaster loan, said comments like that were infuriating. He is still waiting for responses on his applications.Dave Vanslette, who has applied for that program and a disaster loan, said comments like that were infuriating. He is still waiting for responses on his applications.
“It would be great if our administration communicated the reality of the situation instead of saying the process is working perfectly,” said Mr. Vanslette, who runs FairwayIQ, a software company in Waltham, Mass. “This is not my experience.”“It would be great if our administration communicated the reality of the situation instead of saying the process is working perfectly,” said Mr. Vanslette, who runs FairwayIQ, a software company in Waltham, Mass. “This is not my experience.”