YOUNGSTOWN, Ohio – The U.S. Small Business Administration has begun lending in the Great Lakes region to businesses that received assistance from the federal government’s Paycheck Protection Program earlier this year.
“We made a number of loans,” Rob Scott, the SBA’s regional administrator for Great Lakes, told reporters on a conference call Thursday. He said it was too early to quantify exactly how many PPP award requests have been approved so far, but concrete numbers should be in by early November.
The SBA’s Great Lakes Region includes Ohio, Michigan, and Indiana.
Because of the Covid-19 pandemic, nationwide stores were closed in the spring of last year. In March, Congress passed the Coronavirus, Aid, Relief, and Economic Security Act, which provided more than $ 2 trillion in stimulus money to offset the impact on the economy.
Provisions of the Cares Act include PPP, which has approved up to $ 659 billion for small businesses at risk from the virus.
“The SBA mobilized what is probably the largest public-private disaster relief effort in modern history,” said Scott.
In the meantime, the SBA is working closely with the PPP program’s lenders to identify any issues with requests for forgiveness that need to be corrected. The lenders, not the companies directly, submit the applications to the SBA.
Most of the problems so far have been related to simple typographical errors, Scott said. “We’ve heard a lot of times that a decimal point is in the wrong range, so we see things like typos,” he said.
Scott added that the lenders were quick to correct any errors and resubmit the applications.
He said additional help for applicants could be found at www.sba.gov/recovery, while program partners such as the Small Business Center, Veteran’s Business Outreach Center, Score, and Women’s Business Center are available to answer applicants’ questions.
On Oct. 8, the SBA and the U.S. Treasury Department released simplified loan waiver application forms for companies that have received loans under $ 50,000, accounting for about 70% of total PPP loans issued nationwide, Scott said . The application is a single page and takes about 15 minutes, he said.
Still, every business must document that the loan money was spent on eligible expenses, as Scott noted, such as payroll, rent, mortgage, or utility payments.
For example, 60% of a loan a company receives under the PPP program is said to cover payroll withholding, Scott said. Should the company fail to report that this money was used to support its payroll, it would have to repay that portion of the loan.
About $ 138 billion remains in the PPP program, Scott said. “We continue to focus on the survival of our country’s nearly 32 million small businesses as we navigate and get out of this pandemic,” he said.
The SBA began the process of awarding PPP loans on October 4th, Scott said.
However, if Congress changes the rules, many potential applicants have taken a “wait and see” approach before filing their claims. For example, many lenders are pushing for simplified applications for those who have received loans of $ 150,000 or less instead of $ 50,000.
“Should Congress make changes to the award process, the SBA will respond to all laws signed by President Trump,” he said.
Regarding additional relief, Scott said President Trump was ready to push a major stimulus plan to help small businesses but there was no consensus in Congress. To make matters worse, the upcoming presidential election, which is now less than a week away.
“If President Trump is re-elected, I believe we will continue to run the stimulus programs he advocated, and hopefully Congress will endorse it,” he said.
Should Democrat Joe Biden win on November 3, it could stall action in Congress during the lame duck as the country awaits a change of power.
“We will stand still as an agency,” he said. “Small businesses need help now. President Trump set out a lot of things he wanted to do and Congress didn’t respond. “
Copyright 2021 The Business Journal, Youngstown, Ohio.