By: Hadassa Kalatizadeh
The second round of the Paycheck Protection Program still has billions of dollars available for mom-and pop-businesses to claim. On Thursday in a Crain’s webcast, lenders and local business experts said there has been a decline in applications, despite the billions remaining in federal funding awaiting takers. “There is $140 billion in money left that can be accessed by these institutions to do lending,” said Beth Goldberg, the Small Business Administration’s New York district director.
“We’re seeing a dramatic slowdown in terms of volume this week. When the loan program opened up, we had hundreds of applications pouring through the website. Now it’s a handful a day,” said Wendy Cai Lee, President of Piermont Bank. “Today we had one,” she added.
As reported by Crain’s, during the webinar lenders admitted that though the first round of PPP loans in the first two weeks of April were a “disaster”, people should not give up as the current second round is a whole different story. “It really was a tale of two different disbursements,” said Randy Peers, President of the Brooklyn Chamber of Commerce. “Round 1 was a total disaster, and Round 2 was very, very successful.” Peers said that in the first round only 4 percent of the 600 small businesses in Brooklyn that they surveyed received funds, but in the second round, a whopping 92 percent of applicants received PPP funds.
“We’re basically, in many respects, flying blind because we’ve never seen in modern history a sudden and near complete shutdown of the economy. We just don’t have good benchmarks to guide what might be happening,” Goldberg had conceded during a council meeting in April. “We’re in an economic and financial environment that’s changing rapidly.” Goldberg was appointed by the SBA in 2015 as District Director for New York, after 30 years of experience in both private and government sectors.
Across the country, there were 4.4 million PPP loans made for a total value of $513 billion, as of May 16. Still, there is $140 billion more still available and awaiting applicants. The SBA has also shelled out over $6 billion under the Economic Injury Disaster Loan program, according to Goldberg. The EIDL, however, has run out of funds, and would require Congress to pump in more money. “These loan products are great to sustain business and get through this time, but what we’re hearing now is a need for additional capital to restart and take advantage of the economic opportunities that are arising,” said Jonnel Doris, acting commissioner of the Department of Small Business Services.
