Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Treasury Secretary Steven Mnuchin addresses the daily coronavirus response briefing as U.S. President Donald Trump listens at the White House in Washington, April 2, 2020.

Tom Brenner/Reuters

Desperate small business owners in the U.S. who hoped for a quick government lifeline to help them survive the coronavirus crisis are still without funds and are instead battling red tape, wary banks and swamped computer systems.

Thousands of owners who applied for loans under the U.S. federal government’s Paycheck Protection Program are in their second week of waiting for their money.

And thousands who sought relief through Small Business Administration economic injury disaster loans have waited even longer – some since mid-March.

Story continues below advertisement

A few have gotten money. But a panoply of issues at the SBA and banks have far more wondering if they’ll be able to stay in business, having been forced to close their doors due to social-distancing regulations or because customers have cut back their spending.

Those in limbo include owners hoping to avoid layoffs.

The cancellation of weddings, parties and other events forced caterer Leslie Nilsson to lay off half her staff of 10, but her kitchen staffers are still working, preparing 500 meals a day for New York health care workers.

“If I don’t get this money, I don’t know how I’m going to pay them past these next two weeks,” said Ms. Nilsson, owner of Bartleby & Sage. She has applied for a loan under the US$349-billion Paycheck Protection Program. She’s also hoping to get her administrative staff back to work.

U.S. Treasury Secretary Steven Mnuchin raised expectations of nearly immediate cash when, in announcing the Paycheck Protection Program, he said companies could receive their loan money the same day they apply.

But Mr. Mnuchin’s forecast didn’t factor in technological glitches, including problems with the SBA’s E-Tran processing system on Monday. It also overestimated the ability of the banks to turn around the massive number of applications they were receiving.

Since April 3, when the program began, more than 791,000 applications have been approved by the SBA. In 2019, it handled under 60,000.

Story continues below advertisement

Bankers say they knew going into the program that there would be a tsunami of applications. But even those expectations were blown out of the water – Huntington Bank, the largest SBA lender by volume, had 16,000 applications the first weekend. The bank handled 36,000 SBA applications in all of 2019.

A smaller bank, Washington Trust Bank, located in the Pacific Northwest, received 1,900 applications the first week, 20 times the number of applications it handled last year.

“It’s been absolute chaos, and we haven’t even gotten to the point where the program is fully open yet,” said Jack Heath, president of Washington Trust. Heath said there were still another 600 applications waiting to be processed.

Some banks and loan brokers have been trying to rein in owners’ expectations. When Robert Bentz applied to TD Bank on Monday, he was told he’d hear from the bank in three to five days. Mr. Bentz, owner of Purplegator, a digital marketing company based in King of Prussia, Penn., subsequently got an e-mail from a TD staffer saying his application was being reviewed.

But banks’ requirements also frustrated owners. Many banks required applicants to have an existing relationship with the bank, for example, a business checking account, credit card and line of credit. Long-time customers with only one or two accounts found themselves needing to apply elsewhere.

One week in, fewer than a quarter of the banks have actually funded the loans and sent money to businesses, said an executive at a bank industry group, who declined to be identified in order to discuss the details of the program.

Story continues below advertisement

One owner who got her money, Jennifer Tribble, applied through J.P. Morgan Chase on April 5, before the bank put an application link on its website. A Chase employee called Ms. Tribble and helped her fill in the application, a hands-on process that appeared to be a dry run before the bank’s online application went live three days after the program began.

Ms. Tribble received the money Tuesday. Her three Pigtails & Crewcuts children’s hair salons in Orlando, Fla., have been closed since March 23. She wouldn’t be able to pay her 21 workers without the loan.

The loans of up to US$10-million at an interest rate of 1per cent offer forgiveness of money used to retain or rehire laid-off workers.

While some banks were slow to get the necessary infrastructure up and running to accept applications, the problems were further compounded by technological issues at the SBA, bankers said. It is taking more than an hour to submit each application to the SBA, the industry group executive said.

“These systems are not built for massive volumes,” said Karen Kerrigan, president of the advocacy group Small Business & Entrepreneurship Council.

Furthermore, not every bank could use the SBA’s E-Tran system, leaving many community banks unable to help their clients.

Story continues below advertisement

Legalities have also held up the approval and funding process. The banks said they had to wait for the SBA to give them guidance on how to process the loans and distribute the funds. Bankers still cautious a decade after the Great Recession were reluctant to make loans that the government might not guarantee.

Small business owners have also found the economic injury disaster loans problematic.

The SBA began accepting applications in mid-March – these applications go directly to the agency’s website, Then, on March 29 it relaunched the application, using a new, streamlined version that allowed them to apply for a US$10,000 grant provided for in the government’s US$2-trillion relief package. That meant owners who had already applied had to apply again – but many didn’t realize that.

“We’re hearing from a lot of members that the process is mired in confusion,” said Molly Day, a spokesperson for the advocacy group National Small Business Association.

David Busker applied for a disaster loan on March 21, and didn’t hear back from the SBA. When he logged into the agency’s website the first week of April, he learned that he had to reapply and resubmit his documentation. Mr. Busker, whose CycleBar gyms in St .Louis have shut down and who’s lost revenue in his consulting business, said he went into the application process with low expectations.

“I’m not surprised but it’s still frustrating,” he said.

Story continues below advertisement

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies