April 18th Poll: CARES Money Starts To Get To Business Owners In Need
Here's what we've learned from this week's survey of over 16,000 business owners across the U.S.
Where's The Money?
Earlier this week, the U.S. Government stopped accepting applications for two key CARES Act Relief Programs. For the business owners who got in under the wire, 70% are in a state of limbo wondering whether or not their applications will be accepted and 15% are waiting for the funds to arrive.
44% Of Small Businesses Close Doors Due To COVID-19
With 98% of business owners seeing 25% or greater impact on their businesses, 44% of businesses have closed their doors. However, for those with closed doors, the vast majority are saying: "I'll Be Back!" That's the #SmallBusinessStrong spirit.
Here's Why Some Small Business Owners Didn't Apply
For those who’ve decided not to apply, 36% didn't feel they qualified for relief. Reading the comments, the most common answer was because they were solo entrepreneurs, independent contractors, or self-employed.
This was disappointing because as we found in our discussion with Bob Nelson from the Small Business Administration, they were eligible.
Another 20% were working on applying but missed the cutoff.
Please let us know your status regarding the CARES Act loans, sharing what your experience has been so far. #SmallBusinessStrong
Comments (61-70)
Process has been totally frustrating!, been on the internet ,2 weeks nows!,impossible to get help! Passwords ,downloading ,uploading, no direct contact ,everything in the dark.
not sure if they are doing this on purpose, to see who will bail out first.
The big corps took ALL the money away from the small business owners. SHAME ON THE SBA, SHAME!
“I spent 30 years in banking before I started my own business and I will promise you that banks take care of their largest customers first. Especially if there is any chance that the bank’s customer could default on their existing obligations. My son is currently a commercial lender for a regional bank and he had a large customer who applied for a PPP Loan last Monday. He told the customer funds were running out and that he may not get the loan. That customer pulled a "don't you know who I am" moment, and my son said sorry, but you should have gotten the application in earlier. Two hours later my son gets a call from the bank's chief lending officer telling my son to call his customer back and tell him he is approved. The customer had called a senior executive at the bank who sits on a non-profit board with that customer, so he ended up getting exactly what he wanted. The customer apologized to my son for being an ass, but said he didn't want to miss out on the free money.”
So Banks are just like us, we jump through hoops for our biggest customers every day, that's how we stay in business. That's just the way of the world.
And here’s where we’re at today after the Funds ran out last Friday; You can dispute or tweak any of the individual numbers below, but the amount originally funded vs. what is needed seems to be an order of magnitude off.
According to one source - "Based on our calculations, only about 5% of the 30.2 million small businesses in the U.S. with less than 500 people were able to get a PPP Loan." Using that conclusion, here are some calculations:
5% x 30,200,000 Businesses = 1,510,000 Businesses received an initial PPL loan
$350,000,000,000 Available (less about 10% for seepage/losses/fees, etc.) = $315,000,000,000 of money actually Distributed
$315,000,000,000 divided by the 1,510,000 Businesses = Average Loan per Business of $210,000
Let’s say just 75% of all Small Businesses would like a loan (on the low side?), then 70% are still needing to get a loan (5% already got a loan)
70% x 30,200,000 = 21,140,000 Businesses still want a loan
21,140,000 x $210,000 Average Loan Size = $4,440,000,000,000 needed to meet the demand (that’s $4.4 TRILLION).
That’s more than 12 times the original amount funded that already ran out. So, funding of an additional $250 Billion is only going to help about another 1.2 Million Businesses at that rate. Even if we assume the Average Loan size is only $50,000;
$250,000,000,000 New Funding divided by $50,000 Average Loan Size = 5,000,000 Businesses covered (that’s 16,000,000 short of the businesses that still want the loans). We still have a bit of a shortfall and these loans are apparently not going to the Mom and Pop shops that need them right now.
Thank you for the article Eric. We applied to the programs and have heard nothing back. Sad to hear others are in the same shoes.
I'd suggest renaming WHOCARES? I applied directly through the PPP website and BofA, no response. Only thing I've received so far is the money everyone else did for individuals.
Going great though, waters only up to my waist so evidently I have more time...……..
Almost 20 years in business.
I applied 3 days after it was announced. Haven’t heard anything back.
We applied with our bank Chase where we have been a long term business customer on April 5 . We were advised that we were in the front of the queue on April 6 . We did not here anything else until the day after the funds ran out. Chase advised that they had submitted. We have been paying 10 people on our payroll.
If 23% have been approved and only 8% have received money, and all the billions have been sent out, where's all the money? Is it the hands of the BIG banks who have zero incentive to give it out. They make money with other peoples money, so the longer they can hold onto the funds the more money they make.
Applied on the 31st of March. Still haven't heard anything. Very small business. With only 4 employees. But were about to close our doors. Is like America could care less that the small businesses of what keep this country going
I jumped on my bank M&T's application the first day. Got in on Tuesday the second day. Several days later they asked for copies of insurance invoices, 941 payroll records. I scanned and sent them in. Got my money on the 2oth of April. M&T was very good to work with except it would have helped if they said they needed all those invoice copies upfront. Gina, the asst. mgr is worth calling if you still want to try. You need an account at the bank, otherwise go to your bank. It is worth the time these days.