The 10 days Lori Konawalik waited before he could apply for the federal government’s Small Business Assistance Program last month.
Konawalik owns Mac Tabby Cat Cafe in NoDa, and finally received a link in his inbox late April 15 from Wells Fargo, directing him to apply for a loan under the $ 349 billion paycheck protection program.
Like other businesses, Mac Tabby had to close after Mecklenburg Conty issued a home stay order on March 24. The paycheck protection program, part of a massive federal stimulus bill, was intended to keep companies like Konawalik afloat.
But as Konawalik sat down on the morning of April 16 to complete his application, a headline flashed on his screen: The program that would have helped his cafe reopen was out of money.
Funds were exhausted before Konawalik and many other Charlotte business owners could even file their claims. Others had submitted them, but are uncertain whether the requests were forwarded to the Small Business Administration before the money was used.
Such concerns have affected small businesses in Charlotte and across the country. Now they have another chance: Congress voted last week to replenish the loan program with an additional $ 320 billion.
Several Charlotte-area business owners have said they are anxious but cautiously optimistic that they will be successful this time around.
Applications for the second round of funding were opened on Monday to another rocky start, as multiple media reported that the government’s online systems collapsed throughout the day.
And the bumpy rollout of loans has already had direct consequences for business owners.
Konawalik said she is grateful to her customers for purchasing merchandise and gift cards, as well as making direct contributions to the cafe. She kept her staff of six as long as she could, but without the certainty of the Paycheck Protection loan, she couldn’t afford to keep paying. She therefore dismissed them on April 17.
Every day Konawalik tries to find ways to earn an income and have enough funds to reopen.
“It’s not just my business, ”she said. “This is what I live for, what I love.”
Phil Levine has woken up at 4 a.m. almost every morning for the past few weeks, highlighting his candidacy for the Paycheck Protection Program.
Levine’s business, Phil’s Deli, has been a staple in Charlotte for decades. He worked with BB&T, now Truist, for most of that time as well.
But as he filled out the application, he said he was unable to get representatives from the bank to answer his questions. He finally submitted the application the day before the funding ran out with the help of his accountant and someone he hired to help him with the online forms.
Meanwhile, he gives two of his unemployed employees $ 100 a week of his personal savings to help support their families.
Truist spokesman David White said in an email that the company is one of the “most active lenders” and has helped companies get around $ 10 billion in loans for an average of $ 323. $ 000. He said the bank has thousands of employees helping business customers with the PPP application process.
In view of the demand, he said it was not guaranteed that all qualified applicants will receive a loan.
Levine said he didn’t expect to receive a check from the program, even with new funds. If he does, he said he could get at least four of his dozen employees back to his Providence Road location, which is open for pick-up and delivery.
“I think myself and a lot of small entrepreneurs are going to be left behind, ”he said.
Will this tour be different?
Following a backlash on big chains receiving funds as many small businesses defaulted, the new relief plan includes $ 60 billion for small lending institutions.
“This is exactly what minority-owned businesses, women-owned businesses, nonprofits and micro businesses need – and what was missing in the original CARES law,” said U.S. Representative Alma Adams, a Democrat whose district covers parts of Charlotte, said in a statement.
Adams and other Democrats have pushed for the changes included in the bill, but Republicans say it blocked much-needed funding.
Billy Maddalon, owner of the Morehead Inn in Dilworth, contacted his banker in Truist even before loans were first available so he could stand in line.
But he said at the start that he had received a link for the app which was not working. After he finally uploaded his information into the system, he received emails from the bank, saying that they were still working on his request. Then the funding dried up for the first round.
Maddalon said he is considering switching banks because of the issues he faced in the first round of applications. And he submitted documents through online lender Kabbage and North Carolina-based Dogwood State Bank pending the opening of the second wave of funds.
“I think the shine is coming out of the dime,” Maddalon said. “For small businesses, I think the big banks aren’t really suitable anymore. “
White, a spokesperson for Truist, said the bank did not give preference to bigger or richer candidates. The bank is no longer accepting new applications for the program due to an overwhelming demand, he said on Monday.
A series of class actions filed in California and New York, Bank of America, Wells Fargo and other lenders have reportedly sent larger loans to the Small Business Administration before smaller ones. Several banks have disputed the allegations or said they were unfounded, while others declined to comment, the Observer reported. Truist is not part of this lawsuit.
Konawalik of the cafe cat remains frustrated that companies like Ruth’s Chris Steakhouse were able to get the loans while many small businesses like his were left behind. The restaurant chain has since said it will refund the money received.
“These loans are a lifeline for these small businesses”, Konawalik said.
“It’s not just, ‘Oh, your small business needs to close. It’s their livelihood, it’s what people do for a living – they put their heart and soul into it.