Own your business? PPP funds are still available — if you know how to apply
At first, Dr. David Popper swung and missed.
As soon as the Paycheck Protection Program began accepting applications, the longtime Broward County optometrist tried applying through one of the country’s largest lenders for a loan to keep his practice — and its 15 employees — in cash.
After weeks without an answer, he turned to a Fort Lauderdale branch of Brickell-based Pacific National Bank. Right away, he was connected to a personal banker “who was always available,” and within days had received his loan-closing documents.
The lesson: Sole proprietors who own businesses and still need funds, should still apply — but with a local bank, though opening a new account may be required. PPP funds are still available, according to Politco.
“Had I gone to a community bank the first time, I don’t think I would have had that [initially frustrating] experience,” Popper said. “A lot of friends and colleagues got money in the first round because of community banks.”
The federal Bureau of Labor Statistics estimates some 10 million Americans categorized as self-employed. That figure excludes the estimated 55 million “gig workers” — contract employees who file 1099 tax forms — who are also eligible for PPP loans.
According to the BLS, the largest segment of self-employed workers work in personal-care positions, like Popper. While no exact data is available on the number of business owners like Popper who pay themselves as employees, South Florida’s tri-county region is likely home to more than 100,000 of them. A 2018 report from Florida International University shows that in Miami-Dade alone, there were almost 55,000 firms with fewer than five employees.
Linda Kaplan, a Miami-based immigration lawyer, had a similar experience.
Kaplan appplied for a PPP loan shortly after the loans became available in April for the legal practice she has owned since the late 1970s. She’s still waiting to hear from Wells Fargo. She’s been able to keep paying her single employee thanks to trickle of ongoing work.
Friday, a Wells Fargo representative emailed the following statement:
“Since the second round of funds became available for the Paycheck Protection Program, Wells Fargo has submitted more than 100,000 applications to the SBA and we continue to process tens of thousands more in support of our small business customers.
“In order to submit as many applications to the SBA as quickly as possible from our existing pipeline before the $310 billion in funding runs out, we will no longer accept new applications. We will submit completed applications until funds are no longer available and continue to provide additional help to our small business customers during these unprecedented times in the form of fee waivers, payment deferrals and other efforts.”
When Kaplan applied on behalf of a nonprofit group for which she is treasurer, the experience was far different. First Horizon Bank, a Tennessee-based bank with a branch in Key Largo, responded immediately.
“For First Horizon, I received the loan documents the same day and the money was deposited the day after,” Kaplan said in an email.
For sole proprietorships, relief was initially slow. The process for sole proprietorships wasn’t even defined until April 14, 11 days after the first round of PPP funds became available.
The picture has brightened since Congress approved a second round of PPP funding April 27. Data released by the Small Business Adminstration show that through May 1, the largest number — 1.6 million — of PPP loans awarded in the program’s second round have been for amounts less than $50,000 — meaning most went to self-employed workers. And a majority of these loans have been processed by lenders with less than $50 billion in assets.
Big banks say they have no bias against the self-employed. In an email, a spokesman for Citibank said it had approved more than 92% of all applications from sole proprietorships. In the first round of the PPP program, he said, 72% of loans went to microbusinesses — those with fewer than 10 employees — while 57% went to businesses with fewer than five employees.
Christopher A. Meccariello, Chief Operating Officer of Innovative Financing Solutions, a consultancy that works with lenders on government spending programs, said one issue may be the documentation required.
“We haven’t seen any different treatment towards sole [proprietors] and self-employed individuals,” he said in an email. “The issue we’ve seen is many applications from this group have been incomplete, causing a request for additional information or clarification which slows the process.“
Shane Canfield is a Hollywood-based professional driver who drives mostly for limousine companies and fills in with Uber or Lyft gigs. He described applying for a PPP loan as an independent contractor “a full-time job.”
Because he keeps precise banking and tax records, he was able to apply for both the PPP program as well as the SBA’s Economic Injury Disaster Loan program — though he has not been approved.
While he waits for the funds, he’s been getting by on unemployment payments and the $1,200 federal stimulus check.
“I’m current on [my bills] for now,” he said. But among other drivers, he said, “I’m like one in 10.”
This story has been updated with a statement from Wells Fargo.
This story was originally published May 8, 2020 at 6:00 AM.
