ENC restaurants react to small business-focused PPP adjustments
GREENVILLE, N.C. (WITN) - The Paycheck Protection Program serves to provide loans for companies struggling to pay their employees during the pandemic, but any small business owners feel they’ve been left out, saying larger companies snag all the funding before they get a chance.
A new initiative from the program aims to change that by putting the nation’s smallest businesses first.
Chief among the new rules enacted Wednesday: for the next two weeks, only companies with 20 or fewer employees can apply for PPP.
Some small businesses are eager to apply, but others say it’s still not enough.
Molly’s Community Café opened up just 5 months before everything shut down last March.
As a new business, they had no income to base any PPP loans on, so they say they received next to nothing.
“First year, going through what we have, if you don’t have money, well, you keep operations running,” said Ben Cashion, co-owner at the café. “And that payment protection really doesn’t amount to a lot.”
Even some well-established businesses, like 29-year old Mike’s Deli, haven’t had any luck getting more than a few thousand dollars from the program.
“Corporations take billions of dollars; meanwhile, you know, we are here trying to just survive as a family business and sometimes, they don’t make it easy for us,” said owner Terry Hatoum.
“We have three or four employees. Okay, not many. But still, you have to keep them and you have to pay them, so you go dip in the savings and, after a year, what savings do you have? They’re all gone!” Hatoum added.
That’s where the newly revamped Paycheck Protection Program comes in.
“Small businesses kind of got the short end of the stick on being able to get these loans the first time through,” said ECU business professor Dr. Rick Niswander, “but for this two-week period of time, small businesses are going to be the only people in line and if you have an interest you need to take advantage of it.
Niswander says resources like the Small Business and Technology Development Center in Greenville can help owners make sense of not just these loans, but all the associated challenges.
“It’s designed to help small businesses be better, all sorts of ways.”
In the meantime, Molly’s is finally close to breaking even after a grueling first year of operation. But until the restaurant is well into the positive, they say they won’t get the loans they deserve.
“Sometimes when you don’t have a choice, and you have to put in the time and have to put in a labor again, with no pay, the reward is continuing to serve and continue to survive,” said Cashion.
Another key adjustment to the program aims to provide higher payment for those on the fringe. The formula to calculate loan amounts will base its numbers now on gross income, rather than net income, which should yield bigger loans for those small companies who do qualify.
The PPP is a 5-year loan with a 1-percent interest that can be forgiven if specific requirements are met.
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