ROBINSON, Texas — Small business owners across Central Texas are eagerly awaiting government assistance as they enter the fourth week of stay-at-home orders.
On March 27, President Trump signed the Coronavirus Aid, Relief and Economic Security Act (C.A.R.E.S.) into law, granting needed relief to small businesses across America. Two weeks later, few businesses have received any of the bill's funding.
"The unknown factor, it's like it doesn't exist, even though you know you're in the system and have a confirmation number," said small business owner David Ritchie. "So, it hasn't really changed anything yet. It's kind of a mystery."
Small business owners can apply to two different types of loans under the C.A.R.E.S. Act.
The first type of loan is designed to help businesses cover their employees' paychecks. Under the Paycheck Protection Program (PPP), small businesses can receive up to $10 million in loans. If at least 75% of that money goes to payroll and the company keeps their entire staff employed, the entire loan will be forgiven, meaning small businesses do not have to pay any of the money back.
The second type of loan is an Economic Injury Disaster Loan (EIDL). An EIDL functions like a normal loan and can be paid back over 30 years with minimal interest. The benefit to an EIDL loan is the advanced payment that accompanies it. All businesses that qualify for an EIDL receive a $10,000 advanced payment, which is automatically forgiven.
The EIDL payments were supposed to be sent out three days after being processed. Ritchie filed for his EIDL 14 days ago and still has not received a payment.
"At this point in time, it's okay," Ritchie said. "But going forward not knowing what the future is, it might be a lot bigger deal than I think it is right now."
Businesses across Central Texas have seen a similar delay, according to business adviser Tim Holtkamp.
"The [U.S. Small Business Administration] only has what they call interim guidelines that have been released," Holtkamp said. "So, it's like, "This is the way we think it's gonna be, but it's gonna change." So, there's not a lot of security if you're a bank to be able to say, "Yeah. okay. Let me go ahead and get you a loan.""
The unpredictable payment schedule of these loans is just another source of uncertainty for small business owners.
"We don't know what the future is, so we need to plan for what we know, and we're doing our best around that," said Mike Stone, Executive Director of Grassroots Community Development.
Today, Texas Governor Greg Abbott announced the state was adding $50 million into programs to help fund small business loans, but Holtkamp says it is just a flash in the pan.
"$50 million sounds like a lot of money," Holtkamp said. "But it's probably not a tremendous amount given the need that's out there right now."
Small businesses can apply for loans with the SBA here.
If you're a Central Texas business, or are looking to help Central Texas businesses, join our Facebook Group "We're Open - Central Texas."
