Desperate businesses deplete paycheck program in days

Credit: DaytonDailyNews

The checks may take weeks to get to everyone who is eligible.

Credit: DaytonDailyNews

Ohio businesses approved for $12.1B in loans, as of Tuesday

It took about two weeks for a nation of desperate small businesses to use up all of the approximately $350 billion in Paycheck Protection Program (PPP) funds.

The U.S. Small Business Administration (SBA) said Thursday morning the funds were depleted. Funding capacity was exhausted at 10:12 a.m.

Seth Hummel — who owns or co-owns eight Dayton-area businesses, including Speakeasy Yoga, Maximum Potential, IQC, and Strong Plastics Inc. in Piqua — said he has not been approved for any PPP loans yet. Some banks balked at letting him apply because he works with multiple partners, he said.

Hummel is part of a Ohio Small Business Discussion page on Facebook.

"People are posting just left and right about how they're a day away from going out of business," he said.

"I know companies that are bigger that got their money a week ago or 10 days ago, even," he said. "It's been interesting."

There needs to be stimulus for small businesses that are single-owner or pass-through entities, he said. Fifth Third Bank told him he needed payroll records to apply, but he is the sole employee in one consulting business.

"There has to be legislation or stimulus for small businesses," Hummel said.

Businesses who survive this experience, he added: "You are a business warrior, and you deserve to stay in business."

 

“The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. Similarly, we are unable to enroll new PPP lenders at this time,” the SBA said Thursday.

RELATEDPNC Bank warns businesses it's too late to apply

As of Tuesday, more than 46,000 PPP loans had been approved for a total of about $12.1 billion to Ohio businesses, an SBA spokeswoman said, citing the latest numbers.

The federal loans will be forgiven to the extent that those receiving the loans keep their workers on payrolls. The program was an attempt to keep workers employed.

Nevertheless, in the past month or so, about 22 million Americans have lost their jobs.

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PNC Bank and other banks had warned business applicants Wednesday that it was already too late to apply.

“The later an application is submitted, the more likely it is that the application will not be processed and registered with the SBA before PPP funding runs out,” PNC Bank told visitors in a message on its web site Wednesday. “As a result, successful SBA registration of applications submitted to PNC on or after April 15th is unlikely, at this time.”

“We really don’t have more to share about this beyond the message that we posted to our Paycheck Protection Program page today,” PNC spokeswoman Marcey Zwiebel said in an email. “This is information we thought was important to share with our business customers. Hopefully this, and the other information and resources provided on that page, are useful.”

Where the program goes from here is not clear.

“By law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations,” the SBA said.

Congress is deadlocked over how to allocate more money. Both the House of Representatives and the Senate are scheduled to next convene for sessions Monday. Both bodies have continued operating in diminished form, however.

“We urge Congress to appropriate additional funds for the Paycheck Protection Program — a critical and overwhelmingly bipartisan program — at which point we will once again be able to process loan applications, issue loan numbers, and protect millions more paychecks,” Treasury Secretary Steven Mnuchin said late Wednesday.

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