Some small business owners in Arizona said they're frustrated with the process to get loans from the federal COVID-19 stimulus package.
On Friday, the federal CARES Act launched the $349 billion Payback Protection Program, or PPP, which was a key part of the recently-passed $2.2 trillion stimulus package.
The program gives small businesses funds to pay up to eight weeks of payroll costs. They money can also be used to pay interest on mortgages, rent and utilities.
But according to business owners and economy leaders, the program doesn't seem to be operational.
Chris Camacho is the president and CEO of the Greater Phoenix Economic Council. He said there are more than 571,000 small businesses in Arizona.
Small businesses are businesses that have 500 or fewer employees. He said those businesses create 1 million jobs and make 43.7% of all employees in the state.
Camacho explained that the Small Business Administration (SBA) and Treasury released guidelines for the PPP the evening before banks were to begin accepting loans.
"Therefore the banks didn't have a lot of time to get ready," said Camacho. "The challenge is there is a significant number of companies out there seeking these particular loans."
Some banks began accepting applications right away, but others told customers they weren't ready to accept requests, and many banks are limiting applications to customers only. Some banks even went as far as to limit applications to customers that had both an established bank account, and an existing loan product.
On Monday, Wells Fargo stated on its website: "Given the exceptionally high volume of requests we have already received, we will not be able to accept any additional requests for a loan through the Paycheck Protection Program. We will review all expressions of interest submitted by customers via our online form through April 5 and provide updates in the coming days."
Camacho said it's a fluid situation, and things may change in the coming days. "I would recommend go with any and all relationships you have with lending institutions and exhaust those first. Then move on to other banks that may have more capacity and more preparation in advance the release of these program funds," he said.
Owners won't have to pay back the loan if they use the funds for certain purposes permitted by the SBA.
Justin Cross is one of the small business owners who hopes to take advantage of the PPP. He owns Earn Your Booze, which creates fitness and drink events for venues, liquor, beer and fitness brands.
"Yoga studios, personal trainers who are all out of work. On the flip side our venues--hotels, baseball stadiums, bars, breweries, they're all shut down right now," said Cross.
Cross said 30 events have been canceled, which means the dozen contractors on staff haven't been making money.
"Everyone from ambassadors, to photographers, to our trainers, our athletes who run our events who are not getting paid at the moment," said Cross.
Recourses on the CARES Act from the Greater Phoenix Economic Council.
Resources on the Paycheck Protection Program and other COVID-19 financial resources from the AZ Commerce Authority.
