CARES Act’s Payroll Protection Program overwhelmed by small business’s requests for aid

By Kathy Kahn

Just as locked-out employees continue to jam phone lines and overload the NYS Unemployment website trying to file a claim, small business owners are also feeling the pain of trying to get loan applications through to the SBA and U.S. Treasury to get funding to open their doors once the “all clear” has sounded.

The $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) legislation passed on March 27 has been overloaded with small business owners (500 employees or less) looking for help to reopen their businesses and hopefully pick up somewhere near where they left off when the state shuttered all non-essential businesses on March 15, 2020. The closures are scheduled to remain in effect until Wednesday, April 29.

CARES has earmarked approximately $350 billion to help small business owners get back on their feet financially, but getting to a loan officer at your financial institution is not a snap—in fact, the first thing the small business owner learned is that not all banks are participating in the Payroll Protection Program.

Under PPP, a loan will be fully forgiven if it is used for rehiring employees and maintaining salary levels, as well as paying mortgage interest, rent and utilities. There is a caveat: the loan must cover at least 75 percent of the cost of the aforesaid criteria for the entire amount to be forgiven.
For those who need the loan but won’t meet the 75 percent criteria, the money borrowed that is used towards other necessities to restart business will be deferred for six months, with no fees charged from the government or the lender who processes the application—but it must be paid back once the six month period is over.

The application process began April 3 for small businesses and sole proprietors. On April 10, applications opened for independent contractors and the self-employed. Banks are urging customers not to wait too long to apply: there is a funding cap, which may or may not be relieved by further Federal funding.

Any current SBA 7(a) lender, federally insured credit union or depository union and Farm Credit System that is participating in PPP loans process can handle your application. If you haven’t already started the process, check and see if your own bank is one of the approved institutions and get going. You can also see what lenders are participating by visiting

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