Newsday reporter James Madore discusses loans designed to help small businesses survive the coronavirus.   Credit: Newsday

Frustration. Anger. Dismay. Relief.

That’s the range of emotions small business owners on Long Island said they've felt in attempting to secure a loan to weather the coronavirus storm.

The federal loan programs -- the Paycheck Protection Program and Economic Injury Disaster Loans -- have experienced maddening hiccups as record numbers of applications are submitted to banks and other private lenders for PPP and to the U.S. Small Business Administration for EIDL.

SBA had to reboot its online application portal after the personal information of 100 EIDL applicants was exposed last month. Many private lenders are only accepting PPP applications from existing customers with business accounts, which not everyone has.

And now, both programs are out of money until Congress approves more funding. 

PPP’s loan limit of $349 billion was reached on Thursday. Banks aren’t likely to make additional loans until Congress adds $250 billion in federal guarantees to the program, which is expected to be part of the next stimulus law.

EIDL also ran out of money on Thursday, with the U.S. Treasury Department dispensing $17 billion. EIDL loans come from Uncle Sam, not private lenders. 

Giovana Bracchi, executive director of La Fuerza Community Development Corp....

Giovana Bracchi, executive director of La Fuerza Community Development Corp. in East Norwich, said her clients are distressed. "I do a lot of handholding," she says. Credit: Giovana Bracchi

“The application process is overwhelming and intimidating for my clients,” said Giovana Bracchi, executive director of La Fuerza Community Development Corp. in East Norwich, which advises minority- and women-owned businesses in the region. “Their business is closed, they’re distracted, under emotional stress. I do a lot of handholding,” she said.

La Fuerza, with a staff of three, has seen requests for help go from 10 calls per week before the coronavirus outbreak to 20 per day since February.

Both PPP and EIDL are open to businesses with 500 or fewer employees.

The maximum loan amounts are $10 million for PPP and $2 million for EIDL. The interest rates are 1% for PPP over two years and 3.75% for EIDL over a maximum of 30 years. All or portions of the loans may be forgiven.

“There’s a lot of confusion out there about the [loan] programs,” Bracchi said.

About 41,000 small business owners in New York State were approved for PPP loans totaling $11.7 billion as of April 13, according to SBA. The average loan amount was $286,466. The agency couldn't provide PPP data for Long Island or any data for EIDL.   

Here are the experiences of some local loan applicants:

David Baskam said, "I've contacted four banks so far and...

David Baskam said, "I've contacted four banks so far and they either aren't ready to take PPP applications, or you can't get through to speak to someone." Credit: David H. Baskam Construction Services Inc.

David H. Baskam Construction Services Inc., Huntington

“I’ve contacted four banks so far and they either aren’t ready to take PPP applications, or you can’t get through to speak to someone,” said David Baskam, a general contractor who specializes in whole house remodels and additions. “I’ve had my paperwork set and ready to go since April 3,” when the PPP loan program started.

He said he’s seeking $20,000 to cover his salary and that of a secretary for two months. He supports his wife, who recently was laid off from her job, and their two children.

Baskam hasn’t worked since mid-March and doesn’t know when, or if, homeowners will again feel comfortable having construction crews on their property or be able to afford the expense of redoing a house.

“The bank that I’ve had my business account with for years doesn’t have its loan application process up and running," Baskam said. "I’m worried that by the time they do there will be no money left for me.”

That's what happened Thursday when $349 billion in federal guarantees on PPP loans was exhausted. Congressional leaders from both political parties have pledged to replenish the loan program.

Baskam also applied for the $10,000 advance on an EIDL from SBA around April 6 – but hasn’t yet been notified of the status of the application. The EIDL program also has run out of money.

“I’m frustrated,” he said. “This stuff is so confusing and there’s conflicting information out there.”

Doug McCrosson, CEO of CPI Aerostructures, which received a $4.8 million loan, credited the...

Doug McCrosson, CEO of CPI Aerostructures, which received a $4.8 million loan, credited the firm's success to a team of three executives who spent a week learning about the Paycheck Protection Program. Credit: Heather Walsh

CPI Aerostructures, Edgewood

The defense contractor received its $4.8 million PPP loan six days after applying.

CEO Doug McCrosson credited a team of three executives who spent a week learning about the PPP and collecting documents before banks began taking loan applications on April 3.

He also said the company selected the right financial institution: BNB Bank in Bridgehampton. “They were all over it, they knew the system, they were prepared,” he said, adding CPI Aero has had a credit line with BNB since 2017 but opened a business account to apply for the PPP loan.

McCrosson said the manufacturer of wings and other aircraft parts went after the loan to preserve its 280 jobs. “This enables us to keep our people going; it rules out furloughs and layoffs,” he said, adding the company will follow the guidelines to have the loan forgiven.

The PPP money equals 10 weeks of payroll expenses, rent and utilities.

As a supplier to the U.S. Department of Defense, CPI Aero is an essential business “but that’s not to say we haven’t been significantly disrupted,” McCrosson said.

About half of the company’s employees are working from home while 125 to 150 are in the factory, working in two 10-hour shifts Monday through Thursday. The building at 91 Heartland Blvd. is deep cleaned Friday through Sunday.

"For us, the application process for the PPP loan was an unbelievably good experience,” McCrosson said.

Rita Winkler said she needs $5,000 to $6,000 to replenish the...

Rita Winkler said she needs $5,000 to $6,000 to replenish the stocks in her Greenport store. On Wednesday, she  received $3,000. Credit: Courtesy of Vines & Branches

Vines & Branches, Greenport

Rita Winkler needs between $5,000 and $6,000 to replenish her stock of olive oils, vinegars, jarred olives and other gourmet foods so she can continue to fill online orders. They’re sustaining her shop, Vines & Branches, which closed to foot traffic on March 22.

Two days later, Winkler sought an EIDL from the U.S. Small Business Administration, receiving a confirmation on March 30 that her application was received. She then worried her personal information may have been stolen after learning on April 2 that SBA’s online application portal wasn’t secure. She again applied for the loan on April 3 using the agency’s new online portal.

Winkler received $3,000 into her bank account on Wednesday, and with the help of the Small Business Development Center at Stony Brook University, determined it was her EIDL. The funds arrived one day before the loan program was suspended.

"I used some of the money immediately to pay down two credit cards so I could make an order" for olive oil and gluten-free pasta to supply customers, Winkler said. "I'm grateful...This will get me through the month and then I'll have to make a personal loan from my savings to the business like I did in 2019."

She said total sales for the eight-year-old Vines & Branches were down 65% last month compared with a year ago – but online orders were up significantly. She’s offering free shipping on orders of $25 or more, free delivery to customers on the North Fork and 15% off curbside pickup orders.

"The loan lets me get goods in," said Winkler, "to keep my web sales alive and in turn, my business."

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