“Puzzle moments” for businesses struggling to get loans
Construction worker Dani Harvey cuts plywood to cover store windows. Governor Inslee has issued an order requiring everyone to stay home for at least two weeks and all non-essential businesses to shut down to help stem the spread of the coronavirus. (Photo by Karen Ducey / Getty Images)
Small businesses across the state and nation are trying to ask Paycheque Protection Program (P3) Loans to help them survive closures and stay afloat during the pandemic.
Nathan Gibson is a Certified Public Accountant and co-owner of a salon in Lynnwood with his wife. He previously joined the Gee and Ursula Show and said he was planning to apply for a loan. Last weekend Gibson finally received funding after applying on the day they opened applications for the first round.
“It has been a process,” he said. “We were hoping they were going to lock it down for us. I have a good relationship with our banker and it is in one of the smaller regional banks.
For those who aren’t CPA or who may not have a relationship with their bank, Gibson recognizes that the lending process can take even longer and has found the difficulty in helping clients with their requests.
“In my practice, I was responsible for handling all inquiries for all of our clients,” Gibson said. “So I have seen the process for so many banks and each of them, even if we do the same loan, each of them will ask for something a little different.”
“I’ve had specific moments where I watch this happen, ‘I don’t understand where they got this from’, and that definitely adds to the delay in the whole process,” he added.
His advice to small business owners is to consider going to a small bank and working to build that relationship. Many of these small banks are always accepting new customers.
“It’s like a mad rush right now just to try to find bankers who are willing to process your loans,” he said. “Talk to someone who’s been successful at a small bank and see who their contact is and reach out and call them, or email them and see if they’re still taking more people. “
That’s not to say, Gibson said, that big bank employees aren’t working as fast and as hard as they can to make these loans to individuals and small businesses.
“The smaller guys just have the ability to be more nimble,” he said.
Small businesses are also shunned by employees for taking P3 loans, as some people make more money out of unemployment than they would if they were back on the payroll. Gibson admits it’s a tough conversation to have, and that they must have had with their own employees at the salon.
“We have been put in a situation where you have to make tough decisions,” he said. “The P3 program itself is supposed to be there to help keep businesses afloat and give them money so they can cover the rent. If everyone were out of work, then we wouldn’t have the ability to… take portions of that P3 loan and pay the rent, so there wouldn’t be a business to go back to.
His advice to clients was to talk to employees about the viability of the business and the issues. Gibson also recommends being flexible and moving things around to meet employee concerns.
“You can try adjusting your hours so that other people are working the hours another employee was working so they can stay unemployed and the other employee can maybe take advantage of the PPP,” Gibson said. .
“It’s a little more difficult for companies like our salon, where we are still closed,” he added.
For now, Gibson is hoping the government can provide more advice on what things might look like when shows and other businesses can open so they can begin to better prepare.
“We can start to put together the material we need, so that we know how many people, like if we have to start spacing out the living room so that there are certain distance requirements, if there will be a maximum capacity, then maybe in order for a change, we’ll have to open our hours, ”Gibson said.
“We have a lot of ideas, but until we know the rules it’s hard to come up with something solid,” he continued.
Gibson also acknowledged that part of the return will be difficult to plan, not knowing whether employees and customers will be safe enough to return.
“We need more answers than questions and I hope those answers start to come in,” Gibson said. “But we just have to keep working on it together.”
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