Aid Stalls as Businesses Struggle

Main Street

“Non-essential” Highlands businesses, including in Cold Spring, have been forced to close due to the pandemic. Many have been frustrated seeking federal assistance. (Photo by Ross Corsair)

Confusion reigns for owners seeking payroll funds

Laura Leigh Abby and her wife, Sam, had planned for contingencies.

Working with a mentor from the federal Small Business Administration, the couple outlined a financially conservative five-year plan before opening The Studio @ Beacon, a boxing and cycling gym, on Main Street in early 2018.

They knew that Beacon was a small city in the midst of big changes and expected a slow start. But as their clientele grew, the studio was on track two years into the plan. Then COVID-19 hit.

Laura Leigh and Sam Abby

Laura Leigh and Sam Abby (Photo by J. Simms)

“You work for two years to build a business but you’re not thinking, ‘What are we going to do if there’s a pandemic?’ ” said Laura, who, along with the studio’s other instructors, was teaching 21 classes per week until Gov. Andrew Cuomo on March 16 ordered gyms, along with bars, restaurants and theaters, to close to slow the spread of the coronavirus.

The Abbys first applied for an SBA Debt Relief loan — they think.

“It’s link after link and you just click yourself into oblivion,” Laura said. “It was a lot of dead ends.”

They finally managed to submit an application but never received confirmation that it had been received. The next step was to apply for the Paycheck Protection Program.

While The Studio @ Beacon employs about 10 people, many are independent contractors, so the Abbys were initially unclear whether their payroll qualified for the program. They investigated deferring payments on the loan they took out to launch the business, as well.

As they searched for the program best suited for their situation, the clock kept ticking.

Instructors began posting workout routines on Instagram and, for a modest fee, through Zoom, but whatever money that brought in was only enough to pay the teachers.

“We’ve hosted those classes to keep people aware of what we’re doing, but we’re in crisis mode,” Laura said.

They’re not alone. Despite reports of billions in approved loans, numerous small-business owners in Beacon said this week that they’re still having trouble navigating the system.

Laeri Nast, who owns the Play toy store on Main Street, said he, too, is flabbergasted.

As soon as the shutdown began, Nast said he told his three employees that he would pay half their salaries while they stayed home.

“It would only be fair,” he said this week. “I didn’t know what anybody else was doing, but I didn’t want [my employees] to freak out. I wanted them to know they could eat.”

Nast said he called the SBA for guidance on getting a loan but kept getting disconnected after long holds. Aside from a few private orders for Easter gifts, Nast said he’s done little business in four weeks. “Amazon has us walloped” as far as online sales, he said. “I don’t know if I’ve played the cards right. Everybody that I’ve talked to — nobody seems to know.”

Program Suspended, for Now

On March 27, President Donald Trump signed the CARES Act, opening up $2 trillion in assistance to taxpayers, workers and small businesses through a variety of programs, including an initiative in which businesses can receive a loan for eight weeks of payroll, rent and utilities that will be forgiven if they don’t lay anyone off during that time.

As of Monday (April 13), more than 1 million Payroll Protection Program loans had been approved for $248 billion, according to the Small Business Administration, including 41,000 loans in New York State worth $11.7 billion. The average loan has been for $239,000, although 70 percent are for $150,000 or less. About 25 percent of the money has gone to the construction and manufacturing industries and 8.5 percent to retailers.

Banks say they have been inundated, and the American Bankers Association, a trade group, acknowledged on Tuesday (April 14) that the program had “encountered challenges from the beginning,” although the more than 4,600 banks administering the loans were told of the guidelines only days before the funding became available.

Nearly 300,000 JPMorgan Chase customers were “in some stage of the application process” to receive $36 billion in funds as of Tuesday, with more than $9 billion already sent to businesses that employ more than 700,000 people, a representative said on Thursday (April 16). Julia Berchou, an M&T Bank representative, said it continues to process applications “as quickly as possible.”

That same day, the SBA announced it would no longer accept applications for the Payroll Protection Program or Economic Injury Disaster Loans until Congress approves more funding.

As someone whose work relies on close proximity and physical touch, Beacon massage therapist Karen Meyer finds herself in the same boat.

“I know some therapists have other forms of revenue. They might teach or do something like reiki that they can offer online,” she said. “As far as I know, there’s nothing I can do that I could charge for.”

Meyer, a solo practitioner for the last five years, has applied for unemployment benefits, but like millions of other Americans, she found that process daunting. The state Department of Labor told her this week that her benefits are being temporarily withheld because of confusion regarding her income and self-employed status.

In the meantime, she has launched a GoFundMe page and applied for help through that company’s Small Business Relief Fund. Through a partnership with Yelp, QuickBooks, GoDaddy and Bill.com, the fund offers a one-time $500 grant for businesses that raise at least $500 on the platform.

“I’m not one for begging, but I don’t know how long I’m going to be out of work,” said Meyer.

Leonard Sparks contributed reporting. In the interest of disclosure, Highlands Current Inc., the nonprofit which publishes this newspaper, has applied for a Paycheck Protection Program loan but its application has not yet been approved.

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5 thoughts on “Aid Stalls as Businesses Struggle

  1. The Payroll Protection Program is a boondoggle. We applied first for the Economic Income Disaster Loan from the federal Small Business Administration (SBA) and that went nowhere after getting a confirmation. Then we tried the PPP and have no idea where in the process we were when it ran out of funds. I believe we did everything correctly, but there is no way to contact anyone.

    It’s beyond frustrating. I’m angry that out of $2 trillion, only $350 billion was set aside for small businesses!

    Apparently the smaller banks acted on this, but the big banks such as Bank of America seemed to have dropped the ball. Bank of America is unresponsive. You cannot talk to anyone in their branches, and online has no answers other than stock FAQs.

  2. The Payroll Protection Program is a bank program. If you are not getting a response, it is your bank. Some banks have added requirements above what the feds are requiring, which were minimal. After the bank approval, it is sent to the SBA for funding. If you have not received notification of approval, call your bank, not the SBA. Some banks were more prepared than others.

    My request was approved after two weeks and has been in the SBA’s hands for a week as I write this. I found the applica-tion process, once I did my research, fairly simple (3 to 4 pages) compared to what was required by the American Recovery Act in 2009. That application took weeks to complete. The Economic Income Disaster Loan application was simple, as well. There was no confirmation email, which drove me crazy, but after about two to three weeks a deposit was made into my account.

  3. I’m one of the owners of Burkelman in Cold Spring. We have had a similar experience as the businesses in the article, but in the end, the Paycheck Protection Program ended up being the best avenue for immediate aid. We applied through M&T Bank. The application only took about an hour and is much less rigorous than a traditional loan. We were approved for 2.5 times our average monthly payroll from 2019 in about a week, though we are still waiting for the bank to release the funds to our account.

    It’s not a panacea, but it will provide a significant cash infusion to help us get reopened when we can. I highly recommend any business with payroll (even if it’s just the owner) to apply because most of the loan will be forgiven if spent on payroll, rent or utilities. [via Facebook]

  4. The Ruth’s Chris Steak House chain received $20 million from the Payroll Protection Program, which could have covered hundreds of truly small businesses.

    When TDBank finally let us submit an application on April 6, it took three hours to complete. They wasted my time forcing me to upload 14 months of bank statements from an account we have at their bank. We received an email saying we would have a response in three to five days. We were astonished to learn later that our application didn’t even make it to the SBA after 10 days. We have six employees and are eligible for about $50,000, a drop in the bucket.

    We probably won’t see a penny from this program, even if it’s funded again. So what do we do? How can you force us to stay home and then hang us out to dry? We have worked hard for over 20 years to get to where we are, never borrowing a penny from the bank to help us. Thanks for nothing. [via Facebook]

  5. I don’t know anyone who has been funded yet. When I do hear of a bank that gave a Payroll Protection loan, I’ll be switching to that bank! [via Facebook]