Fred Graham, owner of Graham’s Greenhouse and Landscaping in Bradford, Pennsylvania, put in an application for the federal Paycheck Protection Program as quickly as he was able to, on the second day applications were accepted.
But the program, created to help small businesses keep paying employees during the COVID-19 crisis, saw an overwhelming number of requests and its $349 billion ran out before Graham’s application was approved.
“So now we've been told we are in their queue and, if the second wave of funding comes through, then we should be able to get in then,” Graham said. “That's really the only thing we're able to do to help pad our financial futures.”
Graham’s company has been operating in a limited capacity with 13 of its usual 25 employees since March, when Pennsylvania shut down non-essential businesses to slow the spread of the novel coronavirus.
With some help from a webinar, Graham calculated what his business would need and put in a request for $42,000 from PPP, which would help pay his staff and cover utility costs, supporting the business for an eight-week period.
He said the federal program is the help he needs, since it’s a forgivable loan if he continues paying his employees, but he didn’t expect how great the demand would be.
“I was surprised,” Graham said. “When we did that webinar and [from] everything we were reading, it seemed like that there was enough money for most people to get some funding.”
He counted himself lucky, because March and April are not usually as busy as other months, but the pressure remains.
“As a small business owner, you still got to pay your bills, you still got business loans, you got employees. You still have to pay that stuff even though the income isn't coming in. So it's unfortunate that many of these small businesses did not get the help they really needed,” Graham said.
Sherri Geary, director of economic development for McKean County, said the lion’s share of the county’s businesses are small, with less than 100 employees, so many are eligible for not only the federal PPP assistance, but also Pennsylvania’s COVID-19 Working Capital Access program, or CWCA. But eligibility isn’t the issue.
“I don't think anyone was thoroughly prepared for the fact that there would be so many applications against the money that was appropriated,” Geary said. “And that's where we are right now - in that realization of, ‘Oh my gosh, there's not enough money.’ And that doesn't have anything to do with people's effort to get the money to the right businesses. It's just we don't have enough money.”
The state’s CWCA program made $61 million in loans available for small businesses and similarly ran out of funds within seven days.
Jennifer Hibbard oversees small business loans for the North Central Pennsylvania Regional Planning and Development Commission, which helps administer the CWCA program. She said, as of Wednesday, five applicants she works with have received state loans, but most are still waiting for the money.
“There were some smaller requests that may have been around $20,000 or $30,000. But most that I have seen were for the maximum $100,000,” Hibbard said.
Those requests came from businesses in hospitality, lodging, retail and manufacturing among six counties in the region - Elk, Cameron, McKean, Potter, Jefferson and Clearfield.
“There was no particular industry that seemed to request more than another industry,” she said.
Both Hibbard and Geary said they believe some businesses will be left out of these assistance programs. Both of their organizations are coming up with plans to direct some existing loans to those who might not be able to receive federal and state money.
Geary said the crisis is adding to the county’s existing workforce shortage, especially in healthcare and manufacturing. She worries about businesses being able to reopen, whenever that may be.
“It’s going to be tough to recover,” she said.
