There is lots of money left in the Paycheck Protection Program, and small businesses, independent contractors and sole proprietors remain eligible for a portion of the program’s $128 billion. Those who work as consultants can also apply for what is left of the original $380 billion.
But Richie Krug Jr., president of the East Meadow Chamber of Commerce, said at a March 1 news conference that many small businesses are not aware of who is eligible or how to apply for the funds.
“Small businesses need to take advantage of this,” Krug said. “People have no idea that there are resources out there to help them to apply. We have the resources to point businesses in the right direction. And you don’t have to be a member of the chamber to get this information.”
Krug joined a group of local chamber members, business owners, representatives of Vision Long Island and Long Island Main Street Alliance and others in Hicksville to urge small businesses to take advantage of PPP loans by the March 31 deadline.
Rushi Patel and Rajeev Maini, co-owners of the Metropolitan catering hall in Glen Cove, attended the news conference and encouraged other small businesses to apply. They did so last year, and received a loan. Maini said he had been in business for only six month at the time, and had little to show in the way of profit. What he did have was overhead costs.
“I have $60,000 worth in expenses to just open the doors,” said Maini, adding that he had applied for the second round of PPP. “It’s a challenge every day.”
The program was enacted last April as part of the Coronavirus Aid, Relief, and Economic Security Act to help struggling businesses. Consultants, including home repair contractors, beauticians and small independent retailers, were also eligible, but during the first round of funding few applied. Many big businesses did, and benefited.
On Feb. 22, President Biden announced changes to the program (see box) to increase lending to small businesses and independent contractors. During a 14-day window created by the Small Business Administration, which ended on Tuesday, loans were initially offered to businesses with fewer than 20 employees. It was an opportunity for those businesses and contractors to go to the head of the line, said Neil Seiden, of Asset Enhancement Solutions, a financial advisory firm in Uniondale. At the news conference, Seiden encouraged attendees to “apply, apply, apply.”
To find out how much funding they are eligible for, applicants provide their Schedule C from their federal tax returns. “Now they want the revenue amount on Schedule C because of the fraudulent claims,” explained Seiden, who is an agent for multiple lenders. “The first time around they were basing the loan on line 31, which lists the net profit or loss. If the income was $50,000 and the net was $10,000, the loan would be based on the 10. That has changed. Now it’s based on the $50,000.”
In some ways it is more difficult to apply, he said, because more documentation is required to reduce fraud. The process was chaotic last year, Seiden said, because banks didn’t have procedures in place and were overwhelmed by applicants. When people didn’t quickly find out whether they had been approved, they applied to multiple lenders, which made matters worse.
Then the money ran out, and even though it was replenished, some businesses gave up. “Commercial real estate brokers didn’t even know they’re eligible,” Seiden said. “A decorator didn’t know. You have to beg people to apply. The $128 billion is waiting.”
The government needs to promote the program, he said, like it does recruitment in the armed forces, with commercials on television.
Eric Alexander, the director of Vision Long Island and the founder of Long Island Main Street Alliance, who spoke at the event, said that his coalition call its 45 member groups monthly to help them gain access to government services like PPP loans.
“The agitation started when the banks gave the loans to bigger companies,” Alexander said. “We’ve been getting the word out, hitting the drum pretty hard. We want to reach as many people as we can. These are federal funds that you won’t get unless you apply.”
He said he had called over 2,500 businesses in the past year, 2,000 of them in Nassau County. “One-third of the people didn’t know about it,” Alexander said. “I’m glad the Biden administration stepped up to make it more available to small businesses. Hopefully it will be extended beyond March 31.”
In the week after the news conference, Alexander said, he received 20 emails and calls inquiring about the program.