Coronavirus Update: Small Business Owners Seek Loans From Paycheck Protection Program To Stay Alive
RAMSEY, N.J. (CBSNewYork) - Coronavirus has created a health and economic crisis in New York and around the world.
Friday, April 3, is the first day small businesses can apply for loans. While hundreds of thousands of businesses are closed across the country, V&S Cleaners in Ramsey, N.J. is still open a few days a week. However, owner Mark Shnorhokian says business has dried up.
"We're down about 90% of our business right now," said Shnorhokian in an interview with CBS2's Nick Caloway. "So it's been a tough go for us. We've had to furlough our workers."
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Shnorkhokian is one of the many small business owners trying to apply to the new government rescue program. The $349 billion Paycheck Protection Program is intended to help companies retain their workers and pay bills during the coronavirus pandemic. Applications were supposed to be available online starting Friday, but Shnorhokian says he was unable to access the application.
"I was up past midnight last night because they said at 12:01 you could start applying," said Shnorhokian. "And my bank's website had nothing up on their site about this."
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While Shnorhokian is waiting to start his application, accountants like CPA James DeMinno are providing advice to their clients about a loan.
DeMinno, who owns a CPA firm in Rockland County, says small business owners need to be patient and be wise if they get the loan.
"The government wants you to spend 75% based on payroll, for employees and things of that nature. And 25% can be spent on rent, utilities, mortgages, things like that," said DeMinno.
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DeMinno also stresses to read the fine print of the loan application. Some banks require a lending history with a customer and some small business owners may not qualify for the new government program if they've never taken out a business loan with that bank.
"I don't think that's what the SBA [Small Business Administration] or what the government was looking for from these banks," said DeMinno. "But they're basically gearing this toward their existing customers right now."
Like many small business owners around the Tri-State area and the rest of the country, Shnorhokian and his company V&S Cleaners need a loan to survive.
"We have no choice. It's either that or we'll close up shop in a few months," said Shnorhokian. "Those are our only options."
Those options might not be available to everyone, and questions are being asked about why business owners must have borrowed from the bank before to get help from the government now, putting some good business owners at a disadvantage.
