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By Charlotte Keith of Spotlight PA
HARRISBURG — In the frenzied rush for federal disaster relief funding, Brianna Hagner thought she had started early.
After work at her Montgomery County house-cleaning business dried up due to the coronavirus, she applied for a loan from the Federal Small Business Administration. Then, after the massive stimulus package sweetened the deal — offering up to $10,000 up front, with no strings attached — she asked for that money too.
The money – and quickly – was just what she needed, as the money stopped coming in and the bills started piling up. Loan advances don’t have to be repaid, and the SBA said funding will arrive within three days.
Then a week passed with no money and no updates.
Pennsylvania small business owners, reeling from the economic fallout from efforts to contain the coronavirus, are eagerly awaiting these emergency advances. But with the SBA overwhelmed with demand, frustrated applicants complain of long wait times, confusing — sometimes conflicting — information from agency officials, and widespread uncertainty about whether the program will be completed.
“It gave a lot of business owners false hope,” said Hagner, who is based in Boyertown. “Honestly, it’s just been a mess.”
She doesn’t know when she might see the advance, how much she might receive, or if she would get anything.
“I just hope what’s in my bank account lasts until something happens,” she said.
Before the coronavirus hit, the SBA offered long-term, low-interest loans to businesses suffering economic damage from natural disasters, such as hurricanes or floods.
Under normal circumstances, loan applications take approximately one month to process. To get money faster, federal lawmakers earmarked $10 billion to create an emergency grant program, providing repayable loan advances of up to $10,000 that small business owners might receive while their underlying loan applications were under review. The law states that business owners must receive the money three days after the request.
But more than a week after applications opened, many Pennsylvanians are still waiting. The two Pennsylvania senators say they have heard complaints from constituents about delays in getting advances.
Christopher Hatch, spokesman for the Small Business Administration, said the advances started coming out this week.
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“We are preparing for one of the largest such projects in American history and we are working as hard as possible to ensure that the loan applications of hardworking small business owners in the United States are processed as well. quickly and accurately as possible,” Hatch mentioned.
On Friday, the SBA’s website promised applicants that “funds will be made available within three days of successful application.” On Monday, it had been quietly pushed back; the funds would now be “available within days”. On Tuesday evening, it simply read: ‘Funds will be made available following successful application.’
“We roll out a lot of programs in a short time and try to squeeze them through a lot of bureaucracy,” said Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry.
“Was it too optimistic? he said, of the three-day approval process. “Yeah, I think you could say that now.”
Candidates say it’s hard to get a clear answer when calling the SBA for updates.
“It was a simple form to fill out,” said Tina Persing, owner of a permanent cosmetics business in Sunbury, Northumberland County. “The only problem is just the communication afterwards.”
Persing said an SBA agent told her on Monday that they would be in touch next week, but did not say when she would actually receive the money.
“It’s all up in the air at this point,” she said.
The owner of a small consulting firm near Pittsburgh said the first time she called to verify her application, an agent told her she would have the advance within three days. But when she called again that afternoon, someone else told her it would take three or four weeks instead.
There has also been widespread confusion over how much each candidate is likely to receive.
A newsletter sent Monday by the SBA District Office in Massachusetts announced that the advances would begin to flow. this weekbusinesses receiving $1,000 per employee, up to a maximum of $10,000.
Hatch, the SBA spokesperson, confirmed that the agency is using this formula to distribute the money – a change not all applicants have yet been made aware of.
In the absence of clear guidelines from the SBA, panicked business owners are swapping updates and rumors on Facebook and Reddit. On Twitter, disgruntled candidates started a hashtag calling the program a hoax.
For Dave Evasew, the week and a half since his candidacy has meant tough decisions, heated phone calls and hours of waiting.
Its dance and gymnastics center has been closed since the second week of March, when Montgomery County had the highest number of confirmed COVID-19 cases in the state. Non-essential businesses there were told to close even before Governor Tom Wolf issued his statewide shutdown order the following week.
Evasew applied for a disaster loan on March 20. After the stimulus bill created the forgivable advances, he requested one on the day the program launched.
It was last Monday, when Evasew said an SBA agent told him to keep checking his bank account: the advance could come at any time. When he called again on Thursday, another agent told him he would be arriving the following Monday. On Tuesday, he said, an SBA supervisor told him that agents are not supposed to give applicants estimated deadlines at all.
He still hasn’t received any money.
Evasew had counted on the advance to cover last month’s payroll. Now, he says, those checks will bounce.
“I would have made my decisions differently if people had told me the truth from the start,” Evasew said.
Earlier this week, growing increasingly desperate, he reached out to his MP, Democratic Rep. Madeleine Dean, asking for help.
In response, he received an email from a staff member, noting that their office had received several similar requests. The rollout of the program, the staffer wrote, has been “abysmal at best.”
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