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Urgent question from small businesses: When will aid arrive?

When will the money arrive? That’s the urgent question for small business owners who have been devastated by the coronavirus outbreak.

Posted: Mar 30, 2020 5:02 PM
Updated: Mar 31, 2020 11:16 AM

NEW YORK (AP) — When will the money arrive?

That’s the urgent question for small business owners who have been devastated by the coronavirus outbreak.

They’re awaiting help from the $2 trillion rescue package signed into law Friday.

But with bills fast coming due, no end to business closings and an economy that’s all but shut down, owners are worried about survival.

Millions of owners face April 1 due dates for rent, mortgage, credit card and other payments.

Some have been granted leniency from landlords and lenders.

But even then, there are other business and personal bills that are owed. And employees — at least those who haven’t been laid off — must be paid.

“How quick can we get these funds?” says Adam Rammel, co-owner of Brewfontaine, a bar and restaurant in Bellefontaine, Ohio, that’s now limited to takeout and delivery service.

His revenue is down 60%. Yet he has eight staffers, down from his usual 25, whom he must pay.

“Relief can’t come soon enough — we’re a cash business with small margins,” says Rammel, who is looking to Small Business Administration loans. He needs the money despite receiving some concessions from his banker.

Freelancers and people whose gig work has vanished are also anxious about having to wait.

“I need to pay my electric bill and the mortgage,” says Krista Kowalcyzk, whose Southwest Florida photography business has come to a halt as weddings have been canceled and customers have decided against having portraits shot.

She feels somewhat reassured that she can receive unemployment benefits. But while she waits, “I am terrified that not only do I have no revenue coming in, I have also been asked for thousands of dollars in refunds.”

At companies small and large, from restaurants and retailers to sports and entertainment venues, revenue has essentially dried up.

The same for the businesses that support those companies.

Even employers that are still operating have lost business as their customers have become too cautious to continue doing business.

The rescue package signed into law Friday provides for Small Business Administration loans to companies as well as to sole proprietors and freelancers.

The loans can be used for payroll, mortgages, rent and utilities, with those amounts forgiven and payments deferred.

It will also supply small loans that can, depending on an owner’s credit score, be approved quickly.

Employers can receive tax credits for retaining workers, though not if they have obtained one of the SBA loans.

Many owners are also seeking separate SBA economic injury disaster loans. And the Federal Reserve plans to set up a program to lend directly to small business owners.

In addition, freelancers are now eligible for unemployment benefits. And owners can be eligible for the $1,200 per person payment that’s available to many Americans depending on their income.

Whatever the source of funding, how fast it arrives at businesses across the country is sure to have a significant impact on the economy. Slightly more than half of American workers are employed at businesses with 500 or fewer employees. Every lost job means another person will struggle to pay rent or other bills. Unpaid bills, in turn, cut revenue for other businesses.

Layoffs are mounting, and most analysts forecast that the economy will shrink significantly in the April-June quarter, with some estimating a a 30% annual plunge for the quarter. That would be deepest economic contraction for any quarter in records dating to Word War II. In the week that ended March 21, roughly 3.3 million people applied for unemployment benefits — more than 10 times the number for the previous week and nearly five times the prior record high.

Treasury Secretary Steven Mnuchin has said the small loans would be available starting Friday, and in an interview with the Fox Business Network, Mnuchin said he hoped to release loan forms later Monday.

Katie Vlietstra, an executive at the National Association for the Self-Employed, an advocacy group, says she’s concerned about the lag time between application and approval for even the small loans that are intended to have the fastest turnaround. Most small companies have only 15 to 30 days of cash on hand, she said.

There are also worries about potential logjams at the SBA. The agency’s inspector general’s office found that the SBA failed to quickly turn around thousands of loans after Hurricane Harvey devastated the Houston area in 2017. (The SBA didn’t immediately respond to a request for information about handling an influx of applications.)

John Arensmeyer, CEO of the advocacy group Small Business Majority, says he’s concerned that the loans will be processed through the SBA’s traditional business loan program, which relies on banks to handle the initial applications.

“Banks have to retool their technology to do this,” Arensmeyer says. “It’s going to be months before this money gets out there. How many people are going to be able to maintain payroll, hoping to get this money?”

On its face, the rescue aid appears to address some of the most vital needs of small businesses, notably their ability to maintain or hire back furloughed workers eventually. The issue is whether it will come quickly enough.

“The challenge is cash flow,” says Jason Duff, owner of Six Hundred Downtown, a restaurant in Bellefontaine, Ohio. He has a staff of eight, down from 27, handling deliveries and pickups.

Duff has less than a week of working capital funds available. He is seeking loans from family and friends as well as some patience from vendors while he awaits federal help.

Don Allison has bills coming due this week for his business, a publisher of books about the Civil War and northwest Ohio history. He and his wife are looking forward to a combined $2,400. But the royalty checks he must send out require a bigger cash infusion. And he’s concerned about being in a long line of owners hoping to receive SBA loans.

“They’re going to be slammed,” Allison says of the SBA. “How big a delay is there going to be?”

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 74328

Reported Deaths: 3041
CountyConfirmedDeaths
Marion15860725
Lake7570275
Elkhart484384
Allen3902163
St. Joseph350081
Hamilton2763104
Vanderburgh196313
Hendricks1887108
Cass17959
Johnson1757118
Porter131639
Clark123347
Tippecanoe121111
Madison97965
LaPorte91130
Howard89065
Kosciusko85212
Bartholomew79347
Marshall78422
Floyd77946
Monroe75630
Delaware73052
Dubois69612
Boone67846
Noble67829
Hancock66038
Vigo65110
Jackson5865
Warrick58130
LaGrange55910
Shelby55327
Grant52630
Dearborn50828
Morgan47634
Clinton4343
Henry38320
Wayne37710
White36910
Montgomery35421
Lawrence34627
Harrison33823
Decatur33732
Putnam2888
Miami2742
Daviess27320
Scott26810
Greene25034
Jasper2432
Franklin24214
DeKalb2324
Gibson2254
Jennings22512
Steuben2103
Ripley2087
Carroll1912
Fayette1897
Perry18612
Starke1787
Orange17124
Posey1710
Wabash1693
Fulton1682
Wells1682
Jefferson1632
Knox1540
Whitley1526
Washington1401
Tipton13810
Spencer1363
Sullivan1261
Huntington1223
Randolph1224
Clay1215
Newton11810
Adams1012
Jay910
Owen901
Pulaski831
Rush804
Fountain742
Brown731
Ohio655
Blackford642
Benton610
Pike530
Switzerland520
Vermillion520
Parke511
Crawford450
Martin450
Union410
Warren221
Unassigned0206

Ohio Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 100848

Reported Deaths: 3669
CountyConfirmedDeaths
Franklin18317524
Cuyahoga13514499
Hamilton9643255
Lucas5348323
Montgomery436294
Summit3555222
Butler292963
Marion292545
Mahoning2554255
Pickaway238742
Stark1827139
Warren178939
Lorain177078
Columbiana165860
Trumbull1524106
Fairfield138732
Delaware130119
Licking128149
Clark114614
Lake111438
Wood104358
Clermont93311
Medina92335
Miami83938
Tuscarawas78214
Portage75861
Allen74044
Greene69012
Belmont62126
Mercer61213
Richland60412
Erie57527
Ashtabula56946
Geauga55644
Wayne53958
Ross4844
Huron3965
Darke39529
Ottawa38626
Hancock3783
Sandusky37716
Madison37410
Athens3571
Holmes3286
Lawrence2830
Auglaize2546
Union2511
Muskingum2361
Jefferson2292
Scioto2261
Seneca2143
Knox2057
Putnam20517
Preble2032
Washington20322
Shelby1944
Coshocton1936
Champaign1762
Crawford1745
Morrow1702
Hardin16512
Clinton1646
Highland1581
Logan1552
Fulton1481
Wyandot1468
Ashland1443
Defiance1444
Williams1353
Perry1303
Brown1292
Hocking1189
Guernsey1177
Henry1172
Fayette1130
Carroll1115
Monroe9318
Pike760
Jackson740
Van Wert711
Paulding690
Gallia651
Adams612
Meigs400
Vinton312
Harrison261
Morgan260
Noble160
Unassigned00
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