Last week Matt Swihart seemed optimistic.
The coronavirus pandemic had forced him to lay off about 90 employees of the Double Mountain Brewery in Hood River and Portland. But the master brewer had a plan. As soon as a new small business loan program opens on Friday morning, he would apply for a government-backed stimulus loan and rehire as many people as possible.
Monday morning he was alarmed.
“It’s so frustrating,” he said. ” I can not sleep. It’s horrible.”
So far, his candidacy had come to nothing.
The launch of the $ 349 billion paycheck protection program sparked a race among desperate business owners to apply for forgivable loans that would allow them to temporarily retain or rehire workers. But many banks weren’t ready for the crash demands, in part hampered by the administration’s release of its final rules at the 11th hour.
Swihart said his bank informed him on Saturday that it only accepts loan applications from sole proprietorships. Swihart is the primary owner of Double Mountain, but the brewery was started by a group of family, friends and other investors. He would have to wait up to a week for a different request.
It was a surprising idea. Swihart knew that many of the country’s 30 million small businesses were also looking for help. He started to contact other lenders.
“I read things in the news that suggest the funds will evaporate quickly and may not be available,” he said. “So I’m a little panicking that we might be left out of the system. “
This fear is real for many business owners. Wells Fargo, one of the largest banks in the Portland area, announced that it had reached its cap of $ 10 billion by Sunday night.
US Bank, Swihart’s main lender, did not respond to a request for comment on Monday.
The Paycheck Protection Program was designed as a lifeline for small businesses affected by the coronavirus pandemic. It allows them to apply for low interest unsecured loans of up to $ 10 million from their usual banks or other lenders approved by the Small Business Administration. The loans are guaranteed by the federal government and should be canceled if the business owners meet certain conditions, including using 75% of the money to retain or rehire workers.
The emergency program got off to a difficult start.
“It was really confusing,” said Stephen Green, operations director of the Pensole shoe design academy. “It’s definitely a ‘build the plane, fly the plane without wings’ exercise. He spoke from his perspective as a former commercial banker and strong advocate for small business.
Green said he understood the rushed deployment.
“Helping businesses is urgent, I believe,” he said. “But when you do a business like this where the banks lend their own money and hope to get a guarantee on that money, it’s ripe for confusion, mistakes and mistakes.”
He noted that banks treat the program differently, including adopting different requirements for the clients they can serve.
“The experience has definitely been different with each bank so far,” said Matt Jacobson. He seeks loans from four separate banks to support his four businesses, which include Portland’s Bar Dune, Wayfinder Beer and Sizzle Pie pizzerias.
“I was really, really frustrated on Friday when I learned that there were banks, like Bank of America, that were actively accepting applications when we didn’t even have access to a portal or any of the proper documents for it. start the process, ”he said.
Jacobson said he submitted one online application and two paper applications over the weekend. On Monday, he was still waiting for the fourth bank to open its process.
The timing remained a point of confusion for Jacobson, who laid off at least 170 people.
“My goal is to rehire everyone we can, as soon as we can,” he said.
If he is approved for loans, however, he may have to pay staff to stay at home. That’s because it’s unclear when Oregon’s bars and restaurants will reopen to the general public.
“If that happens, that’s what we’ll do,” he said. “But then we hope there is still money to keep them when we really need them.”
Some business owners, including Dara Westling and her husband, were successful in submitting loan applications on Friday morning. The couple own two Bishops Cuts / Color franchises in Vancouver. They applied online through Bank of America, where they have a credit card.
As for the approval:
“We have no idea,” Westling said. “We have received confirmation that our request has been accepted. There was a very clear message not to call any of the branches because no one was going to be able to help us. “
She said it would be “extraordinary” if her small business could use a paycheck protection loan to rehire its 15 employees. But even though she applied early, she didn’t know where she stood among the other companies in the queue.
“It’s really stressful because ‘up to 500 employees’ – these are bigger companies than us,” she said. “And if the banks are encouraged to process larger loans rather than smaller loans, we will be at the back of the pack.”
Nationally, the coronavirus pandemic decimated more than 10 million jobs in March. Many members of the Northwestern business community believe that the government’s small business loan program – even at $ 349 billion – does not go far enough.
“It will never be enough,” Stephen Green said. “I don’t think there is enough when you start looking at the monumental nature of what’s going on right now. We are going through an unprecedented period.
Double Mountain Brewery’s Matt Swihart arrived on Monday evening. Still no word from his bank on when he could ask for help.