Small Business Owners Share Difficulty Obtaining P3 Loans
Small business owners share their difficult and confusing journeys when applying for the Paycheck Protection Program loan.
UNITED STATES TODAY
- Hundreds of thousands of New York City businesses have received funding from the Paycheck Protection Program.
- 47,000 received over $ 150,000.
- Some of the state’s most notable businesses, including shopping malls, ballet companies, museums, restaurants, and food manufacturing companies have applied for the loans.
- The state retained more than 3 million jobs under the program.
More than 300,000 New York City businesses have received loans from the Federal Paycheck Protection Program, which has so far distributed $ 521 billion to struggling U.S. businesses following the coronavirus pandemic, according to data released by the federal government this week.
The federal CARES law created the program in April with the aim of providing financing to companies to retain their workforce and support operations, as much of the country’s population remained indoors for nearly three months.
The program hit its initial limit of $ 349 billion just weeks after its inception, leaving hundreds of business owners unsure of their future. Funds have since been replenished and the program deadline has been extended to August 8.
Hundreds of listed companies received over $ 1 billion in first-round PPP funding, which was not against the rules but left a bad taste in the mouths of lawmakers and business owners who said the program was intended to help small businesses overcome the COVID-19 storm.
“When it was first deployed it was a big mess,” Senate Minority Leader Charles Schumer, D-NY said this week, adding that “the big hits got too much action.”
Nearly 5 million loans have been distributed nationwide so far, with an average loan size of $ 106,542, according to the US Small Business Administration.
Here’s what else you need to know about how PPP has performed in New York City so far.
Thousands over $ 150,000
Nearly 47,000 New York businesses have obtained more than $ 150,000 in PPP loans, including a number of nonprofits. About 450 received between 5 and 10 million dollars.
Over 250,000 businesses received $ 149,999 or less. The data did not disclose the names or addresses of companies below this threshold.
Millions of jobs preserved
More than 3 million jobs have been kept at New York businesses thanks to loan financing, the data shows. About 51 million jobs have been saved nationwide, according to the Small Business Administration.
Large nonprofits get a boost
The arts and entertainment industry took a hard hit in 2020 as social distancing and crowd restrictions took their breath away at museums, theaters, concert halls and festivals.
As a result, major New York City artistic foundations, such as the Ballet Theater Foundation, supporting the 81-year-old American Ballet Theater ballet company, applied for and received millions in PPP loans.
Other notable recipients include the Whitney Museum of American Art and the Solomon R. Guggenheim Foundation.
In small towns, focus on food manufacturing
Dairy maker O-At-Ka Milk Products in western New York, natural baby food producer Beech-Nut Nutrition west of Albany, and Perry’s Ice Cream in Akron, at the east of Buffalo, have all received between $ 5 million and $ 10 million in loans.
Other notable names in upstate New York cuisine were on the loan list, including Dinosaur Restaurants, which has Dinosaur Bar-B-Que locations statewide.
All three employ hundreds of local residents and distribute their products regionally and / or nationally.
Who else got between $ 2 million and $ 10 million?
Management groups that own and operate large malls like Destiny USA in Syracuse, Crossgates in Albany, and Eastview Mall near Rochester were on the list.
Much of the top-tier loan revenue goes to healthcare, engineering, law, accounting, architecture, and contracts.
Schumer of New York is pushing for the Prioritized Paycheck Protection Program Act, known as “P4,” which would extend the initial PPP until the end of the year and allow small businesses that have already applied for, received and used up their PPP loans to apply again.
The P4 would ban lending to listed companies and limit large chains’ access to funds, while favoring companies with 10 or fewer employees for at least $ 25 billion and faster loan disbursement.
Introduced last month by U.S. Democrats Chris Coons of Delaware, Ben Cardin of Maryland, and Jeanne Shaheen of New Hampshire, P4 would also provide qualifying small businesses with up to 250 percent of monthly wage costs or up to $ 2 million. And the bill would allow funding recipients to apply for a loan forgiveness, currently part of the P3 program, as early as eight weeks later.
Includes reporting by Middletown Times Herald-Record reporter Daniel Axelrod.
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Sarah Taddeo is the consumer watch reporter for USA Today Network’s New York State team. She investigates stories about your consumer rights, including scams, negligent homeowners, security concerns, and wayward businesses.
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