RALEIGH – Businesses across the nation scrambled Friday for money included in the federal stimulus package to help the battered economy weather the pandemic.
The Paycheck Protection Program includes nearly $350 billion for loans to small businesses that have had to scale back or close and lay off employees because of the coronavirus outbreak.
″#PPPloan now over $875,000,000 processed almost all from community banks!” U.S. Treasury Secretary Steven Mnuchin tweeted. “Big banks taking applications and will submitting them shortly.”
At the daily White House briefing on the pandemic Friday evening, officials said more than $3.5 billion in loans had been processed on the first day.
Bank of America began accepting loan applications online early Friday, and Chief Executive Brian Moynihan told CNBC that some 10,000 applications were made in the first hour.
“Halfway through [BofA’s] first day administering a small-business relief program, more than 58,000 customers applied for $6 billion in loans,” CNBC reported.
Gus Gusler, who owns the Player’s Retreat, said a loan would help his 40 or so employees, who were all laid off when the restaurant near the North Carolina State University campus in Raleigh had to close amid local and state stay-at-home orders.
“My staff, our team is suffering a lot,” Gusler said. “[A loan] will put all of our staff back on full pay, just like if they were still working. It will allow them to take care of their families and kids.”
The loans can be forgiven if the money is used to keep paying workers for eight weeks.
“It’s designed to keep our workers working, and it gives an incentive for small-business owners to maintain people on their payroll,” said Thomas Stith, district director for the U.S. Small Business Administration.
“These dollars – in essence a grant, a gift – will allow them to survive,” said Brian Reid, president at TowneBank.
The federal government promised applications could be made to banks across the country Friday to get started, but hours before the launch, government officials were still making significant changes to terms and rules.
“We are going to be working through the weekend and building all of the assembly line for this,” Reid said. “There are some serious ramifications if this isn’t handled and executed properly.”
Numerous banking officials had complained about the loan process, and North Carolina Bankers Association told WRAL TechWire that many banks would not be ready to begin taking loan applications on time.
Democratic 4th District Congressman David Price told local business leaders that more programs to aid the economy are needed soon.
“I can’t give you an exact time frame on that, but it should not be too long,” Price said in a conference call with members of the Greater Raleigh Chamber of Commerce. “We really shouldn’t delay.”
Economic Injury Disaster Loans will also be available to businesses to help them through the virus outbreak.
NC Banker CEO: Many banks not ready for virus crisis loans, demand will be ‘extraordinary’
Small biz owners may face ‘chaos’ in applying for $350B in federal loans
