BUFFALO, N.Y. (WKBW) — Some small businesses in Western New York that have been waiting for weeks to receive their Paycheck Protection Program loans, or PPP loans, from the federal government are finally seeing money hit their bank accounts.
Bob Gugino, owner of Bison Automotive and Detail Inc., applied for his loan more than three weeks ago. The money finally went into his account Wednesday, April 29th. Until it came, he had been paying his employees with money his business had saved up.
"We're getting to the point where - I'm getting to the rope's end," he said.
Part of Bob's frustration came from the fact that he was told by his bank, KeyBank, that he was approved for the loan. But each bank handles the loan application and process differently, and in many cases an approval letter doesn't mean immediate dollars and cents.
"There's kind of a staggering process between applying, being reviewed by the bank, approved by the bank, but the funds aren't allotted to your loan until the bank actually goes into the SBA, grabs money and links it to your loan," explained Jim Maloney, an attorney who works with The Stamm Law Firm.
For the past few weeks, Maloney has been helping small businesses navigate the PPP loan process. He says much of the initial $349 billion allotted to the program went to larger loans and larger companies, and that there was somewhat of a learning curve for many. He's confident this second round of money that was approved last week will fund many of the smaller loans local businesses are waiting for.
"We have much more definition and clarity," he explained. "Now the banks have a better grasp on how to approve the loans. There's a large number of loans just sitting there waiting to be funded, and I think it's highly likely just about everybody who applies is going to get their funding in the next couple weeks."
Now that he has the money, Bob will be able to pay his 10 employees for eight weeks, and also pay some utilities with the loan. He says the money was really needed, because since the COVID-19 pandemic, his auto business has dropped to about 25% of what it usually is.
He's hopeful that business will start operating more normally soon.
"You need to know that there's saving lives, and there's saving livelihoods. And we need to find a balance," he explained.
If you're a small business owner who applied for a PPP loan during the first loan application process, you don't need to apply again. Your loan will still be considered by your bank as long as you have all of the appropriate information in. There's no timeline for when each loan will be approved, and money deposited, because many banks have a long line of loans waiting to be fufilled.
When we reached out to KeyBank about Bob's loan and approval process, the bank was able to send us the following statement about its loan processing:
“Out of respect for clients' privacy, we do not disclose or confirm that a person or business is a client, and we do not discuss clients' activities with KeyBank.
KeyBank’s goal is to support our business clients across all our markets and lines of businesses through these difficult and unprecedented times. Our bankers worked tirelessly under a truncated timeframe to help companies that employ 3.8 million people nationwide apply for the Paycheck Protection Program. There were a lot of bankers across the country working around the clock to help their clients gather their documents and paperwork ahead of time before the SBA portals opened up.
Our applications were processed under the guidelines set forth by the federal government. Small businesses comprised approximately 90% of the applications KeyBank processed and 23% of those applicants were located in low-to-moderate income communities. Overall, during the initial phase of the program’s funding, KeyBank was one of the top producers in the country of loans and funding for clients.
KeyBank, along with many other regional banks, urged Congress to take timely action to approve additional funding for the Paycheck Protection Program. Congress has delivered on that request, and we thank them for helping more small businesses and their employees in this time of need. Approximately 10% of our applicants did not receive funding during the first round. We are focused on processing the applications we have so we can help more clients.
KeyBank will also provide support through the Main Street Lending Program to enhance support for small and mid-sized businesses that require financing due to circumstances caused by COVID-19.”