small businesses

Trish Pugh started an Ohio trucking company with her husband in 2015. Even for a small business, it's small — they had two drivers, counting her husband, until they let one go because of the coronavirus crisis.

And so her company applied for a loan under the first, $349 billion round of the Paycheck Protection Program, which the federal government had set up to rescue small businesses.

It didn't go well.

Small and struggling. Those were the companies meant to be helped by the Paycheck Protection Program, which offers loans to small businesses clobbered by the shutdown of the economy.

The program has helped many such companies. But the law's fine print didn't close all loopholes. Large companies, we now know, got loans. And, now it appears that companies didn't have to be struggling to win a loan, either.

Christian Piatt finally got a loan to help rescue his brand-new bar and restaurant in Granbury, Texas.

But it wasn't easy.

He applied through the federal Paycheck Protection Program, which is meant to help small businesses threatened by the pandemic. One bank told him it couldn't lend through the program. Another told him he might have better luck elsewhere. The third approved his loan and he got the money.

Now he's wondering: How should he use his $34,000 loan?

Small businesses, already hammered by the coronavirus pandemic, can't seem to catch a break.

On the first day of the reopened Paycheck Protection Program, a key lifeline from Congress, banks are reporting that the Small Business Administration's portal is not working.

Bankers told NPR on Monday that the system, known as E-Tran, would not allow them to enter loan application information that is needed for small businesses to access the program.

Banks handling the government's $349 billion loan program for small businesses made more than $10 billion in fees — even as tens of thousands of small businesses were shut out of the program, according to an analysis of financial records by NPR.

The banks took in the fees while processing loans that required less vetting than regular bank loans and had little risk for the banks, the records show. Taxpayers provided the money for the loans, which were guaranteed by the Small Business Administration.

Shake Shack is returning a $10 million federal loan after the Paycheck Protection Program that was meant to help small businesses ran out of money in less than two weeks of operation. The burger chain and other large businesses were able to get the money because the program covers any company with fewer than 500 workers in a single location.

Greg Hunnicutt has almost entirely shut down his Houston-based construction business. At his one remaining job site, he's being careful to minimize the risk of anyone being exposed to the coronavirus. So he keeps fewer workers on the job.

"My electrician is there now doing some work," he said. "It's just him and his helper. So what I'm trying to accomplish here is reducing how people interact."

Starting today, small businesses can apply for the nearly $350 billion in loans available through the economic rescue plan from Congress.

The loan program, known as the Paycheck Protection Program, is intended to support businesses so they can ride out the tough economic times and, most importantly, assist with either keeping current workers or rehire those who were laid off.

Democratic nominee for Ohio governor Richard Cordray visited a manufacturing site in Cleveland on Tuesday and talked about his small business plans.  

Cordray met with business leaders for a closed-to-press session at Magnet, a manufacturing incubator that receives state and federal funding.

The former federal consumer protection chief then toured the facility on the eastern edge of downtown. Founders of some of Magnet’s startups showed off their products. Cordray handled lightweight “smart mulch,” inspected adaptive clothing for seniors and sampled Cleveland Whiskey.

Launching a new business has never been easy, but it's even tougher for startups in the post-recession economy. Credit remains tight, and banks in Northeast Ohio rarely risk loans to unproven entrepreneurs.

In this week's Exploradio, WKSU's Lucas Misera looks at how small-business owners are getting creative in startup financing.

Show Me the Money

As the state’s budget shortfall approaches a billion dollars, a tax cut adopted four years ago is getting close attention. The small business tax cut promoted by Republican leaders has saved business owners money – but has gained a lot of criticism in the process.