The federal government’s massive Paycheck Protection Program, which has been a lifeline for small businesses hit by the pandemic, has become so mired in confusion and delays as money runs out that hundreds of thousands of applicants may get no help, especially in underserved minority communities.
The upshot: With only a week before the program closes, the second and last round of relief is all but frozen for hundreds of thousands of small businesses. “By the time I caught up to what I need to apply, then boom-bam-bam, they announced they ran out of funds,” said James, who was hoping for just a couple of thousand dollars to get her business back on its feet. “Where do I fall into this? People like me are suffering.”
The agency is a relatively obscure one. Biden tapped Isabella Guzman, a former small-business advocate for California Gov. Gavin Newsom, to lead it. After the Senate confirmed her in mid-March, she set out to expand outreach and to increase loans to those most in need, including businesses in rural and poorer communities. Statistics suggest she has met with some success.
Adding to the complications, the SBA this month restricted new applications to participating community financial institutions, including certain minority-owned banks and credit unions serving lower-income areas.The move was aimed at giving priority to smaller institutions in underserved communities, but the SBA’s announcement blindsided many larger banks and facilitators such as Womply, which had to break the bad news to applicants.
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Emergency 🚨 Nearly 140,000 children under the age of five and pregnant or lactating mothers are now affected by acute malnutrition.