Under the second phase of the Paycheck Protection Program that launched Monday, $12 million is earmarked for loans to minority-owned small businesses in Nassau County, officials said. But so far the rollout of this next installment, intended to help small businesses affected by the coronavirus crisis, has been rife with confusion and technical problems.
The initial launch of PPP—part of the $2 trillion stimulus package that the federal government passed March 27—was rocky, with small businesses across Nassau County and the United States reporting difficulties submitting a loan application. The funding ran out within less than two weeks of the program’s launch, leaving countless business owners and employees in Nassau feeling stranded as some large publicly traded companies walked away with loans.
Under the second phase $310 billion is available for loans, which small business owners can use to cover payroll, benefits, rent and mortgage. Within that amount, $12 million has been set aside for Nassau’s small business community.
Once the Small Business Administration announced that the program had reopened Monday, banks rushed to submit loan applications that they had received from businesses after the initial funding ran out. Many reported that they were unable to get into the online application system.
“Our member banks across the country are deeply frustrated at their inability to access @SBAGov’s e–Tran system,” tweeted Rob Nichols, president of the American Banker Association, Monday. “We have raised these issues at the highest levels. Until they are resolved, #AmericasBanks will not be able to help more struggling small businesses.”
The SBA said in a statement that it had created a mechanism intentionally slowing the pace of applications that any given lender was submitting at one time.
Around midday Monday, the SBA lowered the number of applications that banks could submit from 15,000 to 5,000.
The SBA announced Monday that the system was not open to individuals. Those who had already submitted an application to their bank and had it approved were assured that their application would go through.
SBA head Jovita Carranza tweeted Monday that the agency had approved 10,000 loans within the first five hours.
The Consumer Bankers Association warned that the program is likely to run out of funding again in about four days, according to CNBC.
The New York State Common Retirement Fund is providing $50 million to supplement the PPP loans. Pursuit, an Albany-based private lender formerly called New York Business Development Corp, will be administering the loans.