Caps on federal, state small business loans puts SWFL businesses in danger
Small business loan money is wiped out. And businesses in Southwest Florida were counting on the money from the state and federal governments to stay afloat and pay their employees.
We looked at what happens next now that the Small Business Administration and the state both say they have reached their respective limits to provide small business loans.
The reality is, if some local businesses don’t get financial help, their doors might not open again. Funds from both the SBA Paycheck Protection Program and Florida’s Small Business Emergency Bridge Loan program have reached their caps.
That’s $350 billion from the PPP and another $50 million from Florida that have all been doled out.
“Today, we got an email from the State of Florida that said that there was $50 [million] for Florida, and it’s gone,” said Zollen Loucks, the managing partner for Duval Street restaurant in Cape Coral. “Sorry. No more money is coming this way.”
Loucks says the money would’ve helped tremendously.
“If we can open May 1, we’re looking at a month and two weeks we’re closed,” Loucks said. “That’s a lot. That’s a big bullet to swallow.”
Loucks’ restaurant shut its doors because of the virus. Now, he’s learning they might not get a financial lifeline.
“It could mean there is no future,” Loucks said.
Locks says, what makes matters worse, his employees who have been laid off, who he hopes to hire back, are still struggling to get unemployment funding from the state.
In Florida, only 1,000 small businesses of the 38,000 that applied were approved for funding.
“Somebody didn’t do basic arithmetic to account what is eight weeks of payroll for small companies of America of under 500 and do the arithmetic,” said John Gallagher, a certified public accountant
Gallagher says 85% of his firm’s clients were never even allowed to apply.
“We’ll put you on the list, and we’ll get back to you at some undefined time in the future,” Gallagher relayed the response applicants receive through the state program. “We have not even been allowed to complete our application.”
Gallagher says the only other options could be both costly and time-consuming.
“In normal times, 30 days is a quick turnaround for a loan,” Gallagher said.