Coronaivrus has almost completely knocked out this Michigan entrepreneur’s business. A second round of the government’s Paycheck Protection Program could finally offer some relief.
MICHIGAN — Now a company of just one, Michigan businesses like Le Crepe in Royal Oak are struggling to survive.
Owner Dennis Williams opened in 2016 but was forced to let go of his small five-person staff.
“We’re just trying to be relevant while this is going on,” Williams told The ‘Gander.
He now runs the restaurant that is open for delivery and takeout completely alone.
“I applied on city, state and the Federal level,” he says. “I’m resentful that it is a process because I know when [large] companies get bailouts, they just get the money.”
Williams received confirmation his applications were received, but has yet to receive any other correspondence.
He’s not alone.
What help is available?
The first round of funding for the Paycheck Protection Program (PPP) approved more than $10 billion in forgivable loans for over 43,000 Michigan businesses impacted by the COVID-19 outbreak. That’s less that 1% of the $349 billion that was authorized nationally.
Michigan business owners still need help and now private businesses, state and Federal lawmakers alike are working to ensure they survive the current health and economic crises.
Michigan small businesses that meet the SBA size standards that are eligible to apply for funding include the hospitality and food industries, businesses and sole proprietorships, independent contractors and self-employed persons.
Michigan For Michigan
Lt. Governor Gilchrist teamed up with his predecessor, former Lt. Gov. Calley, to encourage Michigan small businesses to apply for the $310 billion available in the Paycheck Protection Program’s second round of funding.
Loans through the PPP can be 100% forgivable — meaning Michigan’s business owners would not have to repay the money.
“There continues to be a significant need for additional resources to support our small businesses facing many challenges in the face of the COVID-19 virus,” Lt. Governor Garlin Gilchrist II said. “This additional funding for the Paycheck Protection Program offers much-needed financial support for our small businesses and their workers to help them get through this tough time.”
Private Sector Help
On Tuesday, Facebook announced that it will make $150 million in grants available to small businesses in Detroit.
CFO Sheryl Sandberg posted on the social networking site, “Small businesses are the heartbeat of their communities. We are determined to help and we know the road ahead will require a lot more from all of us.”
Instagram, a social media platform owned by Facebook, is also working to get gift cards to entrepreneurs in need. Michigan businesses can check their eligibility on the Facebook for Business page.
Goldman Sachs is also stepping in to help local businesses, making $15 million available directly to those located in Detroit, the Michigan Chronicle reports.
“This crisis has served to underscore just how important small businesses are to the economy, both on a local and national level. Small businesses truly are our economic foundation, employing half of the American workforce,” said David Solomon, chairman and CEO of Goldman Sachs.
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Still, Some Forgotten
The Courier reports that when Latino and other small minority-owned businesses need a loan, they’re often left turning to non-profit lenders—it’s easier for them to get financing there than at big banks.
And, according to NBC News, it’s no different with the small business loan program the federal government created to help keep businesses afloat and pay their employees during the economic crisis.
There is fear that most of that money will go to larger, wealthier, and less diverse businesses: Small lenders have to share that $30 billion with small banks owning assets of $10 billion or less, which is basically 95% of the nation’s banks.
A survey conducted by The League of United Latin American Citizens and the U.S. Hispanic Chamber of Commerce showed that of the more than 500 Latino small businesses that applied for loans, only 97 received money in the first round of PPP funding.
“It’s this type of dealing that perpetuates the racial wealth gap and breeds public resentment and distrust,” Center for Responsible Lending (CRL) Federal Advocacy Director Ashley Harrington said in a statement.
White House Contradictions To Congressional Action
Treasury Secretary Steven Mnuchin told the media on Thursday that he wants to use Federal Reserve money to create a government loan program meant solely for big oil companies. Mnuchin is acting on the direction of the President and Energy Secretary Dan Brouillette to find a way to save the declining industry this week.
“If this plan ends up using some of the $500 billion Congress allocated to the Treasury Department in the CARES Act, the Congressional Oversight Commission has oversight authority and should scrutinize the plan very carefully,” tweeted Bharat Ramamurti, who was appointed to the stimulus oversight panel by Senate Minority Leader Chuck Schumer.
Some small businesses that obtained a highly-coveted government loan say they won’t be able to use it to bring all their laid-off workers back, even though that is what the program was designed to do.
The Paycheck Protection Program promises a business owner loan forgiveness if they retain or rehire all the workers they had in late February, and the money is used for payroll, rent, mortgage interest, or utilities. But owners say the equation isn’t so simple, in part because of current economic conditions and partly due to the terms of the loans.
As a result, the lending may not reduce unemployment as much as the Trump administration and Congress hope.
More information is available at MIpaycheckprotection.com.