Riggs said the majority of local “Main Street” businesses only needed $50,000 or less to get by for a couple of months. The majority of these businesses did not receive PPP money, he said.
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In Ohio, there were 26,541 approved loans totaling $10.3 billion. Nationwide, there were more than 1 million loans as of April 13, amounting to $247.5 billion. The overall average loan size is $239,152.
Another issue was that the banks were not properly prepared to handle the massive amount of loan requests as they were short-staffed and had limited hours during the crisis, Riggs said.
“What’s going to happen to the restaurant industry for example?” he said. “When they are allowed to open, they will have to restock all the perishable inventory. I can see the suppliers not issuing credit at first and will want cash on delivery. These businesses have no cash flow.”
“Dollars could have been prorated and sent to the municipalities and distributed as needed,” he said.
Jessica Greene, assistant city manager for Oxford, said local businesses are simultaneously “extremely stressed and frustrated” by the SBA process but also appreciative that there is something out there that can help them.
“Our community is home to very small businesses, and they don’t have technical experts to help them,” Greene said. “They are trying to figure this out on their own, while also trying to figure out if they can be open, how can they get creative and offer their products/services to stay afloat.”
Greene said she has heard of people waiting on hold for long periods with representatives of the program and not being able to submit applications online and banks that were no longer taking applications.
“As you can imagine, this then creates more stress for our business community,” she said. “Frustrations and tensions are high. I hope we can figure out these glitches in the application system.”
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Kert Radel, president and CEO for the Fairfield Chamber of Commerce, said it was a plus that the federal programs were available to small business owners, but “a real negative” that there was a loophole that allowed several large companies to receive funding.
“It fell short funding small business (in) America, and the new measure still may not be enough,” he said. “The small business owner is being crushed. It is vital to do everything that we can do to keep people safe.”
Michael Rudolph, a financial advisor for New York Life in Oxford, said he is thankful the federal government and the SBA included funding for small businesses in their stimulus package, the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, but gives them “a very poor grade” for the implementation details of the plan.
“The SBA-approved lenders here locally in the Butler County area appeared to have been given no early direction or provided processes to accomplish the distribution of the funds until a significant period of time had gone by,” Rudolph said.
“Many seemed be creating their processes as they went along. By the time the process was in place, as we saw, the true small business had no shot at getting any funding. Many businesses that did receive funding, in my opinion, did not fit a true definition of a small business.”
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While larger employers need to keep their employees on the payroll, their options for refinancing or extension of other credit to keep themselves afloat “far exceed those of most true small businesses,” Rudolph said.
“The PPP was a true financial lifeline available for the small business that many did not receive in time,” he said. “There was no local help offered or even considered by the SBA or other business support organizations to assist with the process. Lots of vague instructions, but no assistance. Quite a disappointment, indeed.
Rudolph said his New York Life office received its funding only after much-needed assistance was offered by its bank to help it wade through the process.
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