More than 100,000 loans totally $14 billion were approved for small businesses in Missouri under a program aimed at helping them survive the COVID-19 financial disaster.
Nationally, 3.8 million loans adding up to more than $500 billion were approved under the Paycheck Protection Program managed by the Small Business Administration and introduced following the passage of the CARES Act.
Forty percent of the clients of a business development center in the St. Louis area received relief under the two phases of the program, its regional director said.
Lynette Watson, regional director of the Small Business Development Center (SBDC), said, "I would say it is kind of eggs in one basket, and not in others."
Around 40 percent of her organization's clients have received some payment, or been approved, but many others "are waiting in limbo," Watson told the St. Louis Record, adding that the SBA id now more easily contacted through a hotline it established.
"This is helping but it is not going to be enough," Watson said.
She highlighted the experiences of sole operators, with a business model complicated by the fact many do not claim income, and minority businesses, many of whom took much longer to gather the correct paperwork leaving them largely excluded from the first phase of funding.
"The first phase was very challenging but some are finally getting some relief," Watson said.
Treasury Secretary Steve Mnuchin and Small Business Administration Administrator Jovita Carranza, in a joint statement Sunday, said that the average size of a loan made under the second phase, which began April 17, was $79,000. This compares to $206,000 in the first phase.
"The Paycheck Protection Program is providing critical support to millions of small businesses and tens of millions of hardworking Americans," Mnuchin and Carranza said, adding that the average loan size indicated "the program is broadly based and assisting the smallest of small businesses."
Under the CARES Act, the Paycheck Protection Program provides small businesses with funds to pay up to eight weeks of payroll costs, including benefits. The loans will be 100 percent forgiven if employers use them to cover eligible expenses.
Companies are also eligible for disaster loans of up to $2 million, with interest rates capped at 3.75 percent for businesses and 2.75 percent for nonprofits and long-term repayment plans.