Just 3% Of California's Small Businesses Got Federal Coronavirus Stimulus Loans
There are approximately 3.7 million small businesses in California, and only 3% of them received help from the Paycheck Protection Program. The federal coronavirus-related stimulus fund ran out of money last Wednesday.
According to the federal Small Business Administration, 112,967 small businesses in California were approved for the loans, which are part of the Coronavirus Aid, Relief, & Economic Security Act, and can be forgiven if used to keep employees on the payroll.
Danny Kronfli is one of the lucky few. He and his brother own the Bacari restaurants in greater L.A. He applied for a PPP loan on April 3, the day the program opened. By April 8, he had received his money and was able to hire back more than 20 employees -- which is exactly what the program is designed to do.
"We just got really lucky that we didn't bank with one of the major banks, we didn't really have a line we had to wait in," Kronfli said.
Kronfli uses a bank called Commerce West, which has just one location, in Irvine.
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Meanwhile, business owners who use Chase, Wells Fargo, U.S. Bank, Bank of America and other large banks complained on Twitter that they were unable to apply before the $349 billion in PPP funding ran out.
Maribel Cabrera, who owns Las Delicias Taquería in Santa Clarita, was finally able to submit an application to Wells Fargo last Wednesday. But then on Thursday, she received an email saying the PPP had run out of money. She was unclear whether her application had been processed or not.
"Do I get some? Or am I in limbo?" she wondered.
As of Monday morning, Congress was working to finalize a deal that would add an additional $300 million to the PPP.
BETTER BET WITH SMALL BANKS?
Anecdotally, small banks appeared to be able to process loans faster and earlier, said Pat Nye, who runs the L.A. Regional Small Business Development Center.
Pacific Enterprise Bank, a small, Irvine-based bank, was even able to help non-clients apply for the federal loans, which is almost unheard of among larger banks.
"We started getting inundated by other banks trying to dump all their submissions on us because they couldn't process them themselves," said Brian Halle, president Pacific Enterprise Bank.
Halle's staff took care of all their clients' PPP applications by filing them with the Small Business Administration in the middle of the night, when the server was less likely to be overwhelmed.
"When the world was sleeping, at 2 a.m., they could pull applications very quickly," Halle said.