Small Businesses Seeking Assistance To Stay Afloat Finding Frustration Instead Of Lifeline
Local businesses facing unprecedented challenges due to the COVID-19 pandemic and related stay at home orders were hopeful for a lifeline through Small Business Administration programs authorized through the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law on March 27th. Two programs, the Economic Disaster Injury Loan (EIDL) program and the Paycheck Protection Program (PPP), promised emergency funding for small business owners and independent contractors/freelance/gig workers. As of April 16th, PPP funding was exhausted and EIDL funds were depleted.
Local small business owners faced confusion over how to apply and the information needed to complete the application process. Banks also faced confusion as rules continued to change as the program was rolling out.
Businesses were asked to work with their local banks to complete the process, and success for hopeful business owners has been mixed.
“Due to the overwhelming demand for these SBA Paycheck Protection Program loans, the State Bank of Missouri, unfortunately, had to limit applications to only existing State Bank customers. To date, our bank has provided close to $2.8 million dollars in PPP loans to assist our small business customers,” State Bank of Missouri President Mark Heins said.
The $2.8 million dollars provided by State Bank represents 53 loans to local businesses.
National news stories have focused on large loans granted to large chain businesses, such as Ruth’s Chris Steakhouse and Shake Shack, seemingly pushing out small “mom and pop” businesses from accessing funds intended to assist in their survival. Congress is currently ironing out details to pass additional aid while many small business owners wait to see if the next round will provide any relief to the daily reality they face.
Snowie Shaved Ice of KC owners Jeff and Corrie Wolff are usually gearing up for a busy season of serving up shaved ice to local school carnivals and parties, baseball tournaments, 5Ks and athletic events, and area festivals. Instead, the Grain Valley company is facing an uncertain future.
“Snowie is essentially shut down right now at what should be the start of our season. We have a concession stand at the Independence Events Center that has been shuttered for the last 6 weeks and has no opening date in sight. We still have costs associated with keeping that stand in place there. For the Snowie bus, our main concern is that our business model is not aimed at driving around in subdivisions all day; my wife (Corrie) and I both work full time jobs and we are now teachers to three elementary and middle-school aged boys,” Jeff Wolff said.
The community, sporting, and school events Snowie Shaved Ice of KC depends on have disappeared due to the pandemic and their return in the foreseeable future is uncertain.
“We will likely have zero income from the Snowie bus for at least the first half of our season. We have monthly expenses that must be met regardless, such as payments on our equipment, insurance, food handlers permits and inspection fees, business license fees, property taxes, sponsorship agreement installments, etc. Since all of our income is earned during the summer months and has to provide us with a nest egg that can last us through the winter billing cycle, we could be in really bad shape if we can’t do business this year,” Wolff said.
“I applied for the EIDL program on the morning it was announced as being available. My application for an immediate cash infusion of $10,000 was submitted and I was told I would get a response within three days. I have heard absolutely nothing since, and as of April 20th the SBA says it has funded 210 loans in the entire state of Missouri, so I’m pretty confident that I won’t be receiving any help.”
Jayci Stratton, owner of Studio Five Beauty Boutique, has likewise been unsuccessful in securing small business emergency funding.
“I applied for the $10,000 SBA loan about two weeks ago and have not received any communication back.”
“There are nine of us in our salon. Each of us has filed for unemployment and no one has received anything. In fact, everyone was initially denied except for me, and that is because of how I file as a business. But my coworkers keep getting told that the system isn’t set up for self-employed people yet and to keep checking back,” Stratton said.
The Missouri Department of Labor and Industrial Relations’ (DOLIR’s) Division of Employment Security (DES) announced April 20th it is now processing unemployment claims for the self-employed, gig workers, independent contractors, and those who otherwise do not qualify for regular unemployment benefits and have been impacted by the coronavirus. Under the Pandemic Unemployment Assistance (PUA) program, those who qualify will be eligible for weekly benefit payments of between $133 and $320 per week plus a $600 federal supplement available under the Federal Pandemic Unemployment Compensation (FPUC) program.
The federal guidelines provide the $600 federal supplement only applies to weeks that are payable from March 29, 2020, through July 25, 2020. These two programs are not regular unemployment insurance but are new, fully federally funded assistance programs.
To be eligible for a PUA claim, individuals must first file a regular unemployment claim and be found ineligible. Most self-employed individuals who file a claim will receive a notice that they are not an insured worker. This is because they are not covered under the regular unemployment insurance system.
Individuals in these groups who have been negatively impacted by the coronavirus, and have not already filed a claim, are encouraged to file online at uinteract.labor.mo.gov.
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