The Washington PostDemocracy Dies in Darkness

The Finance 202: Small businesses struggle to secure coronavirus relief amid glitchy loan rollout

with Brent D. Griffiths

Adam Milne doesn't have time to wait. The owner of Old Town Pizza & Brewing, in Portland, Ore., laid off two-thirds of his staff in late March after the state imposed social distancing measures in response to the coronavirus. He shifted the two-restaurant operation to pickup and deliveries in a bid to keep it afloat.

But the small business owner has piled up $25,000 in credit card debt and counting covering rent, utilities and insurance. To avert closing his doors — and to bring his full staff back to work — Milne is scrambling to secure a $189,363 government lifeline. 

The process of attempting to get an emergency loan through the administration's Paycheck Protection Program, which launched Friday, has been a stressful mess. 

Despite a long-standing relationship with Wells Fargo, Milne never received the notification he’d signed up for to notify him when the bank’s online application portal went live. Instead, he learned Monday – over Twitter – that the bank had reached a $10 billion limit for lending under the program and wouldn’t be accepting any more applications. 

He also submitted a request to U.S. Bank, which said it would reach out with follow-up questions before processing his application. He's still awaiting that inquiry, with no clarity on whether funds will come. 

“It’s been a free-for-all,” Milne says. “We desperately need these funds to keep us alive … and our employees want to come back to work.” 

Millions are caught in similar limbo. 

Small business owners are not only struggling to navigate an unprecedented economic shutdown forced by the coronavirus; they are also knee-deep in the bureaucratic morass of what is meant to be Washington’s rescue effort. 

The $349 billion program to provide forgivable loans to smaller businesses has been beset by a technically buggy rollout and mounting concerns that its funds will run dry long before reaching many that are counting on its help.

The nation's biggest banks have already committed 10 percent of the total, my colleague Renae Merle reports. Bank of America alone said Monday it has received 178,000 applications seeking $32.9 billion. “Some big banks, including Citigroup, still haven’t begun accepting applications. JPMorgan Chase, the country’s largest bank, took its site down briefly to make ‘essential updates’ and simplify its application,” Merle writes.

Major glitches with the processing system for the program are adding another layer of headaches. Reuters’s Pete Schroeder and Michelle Price report that “U.S. lenders were unable to process loan applications for hours on Monday after the SBA’s online portal crashed around midday. A senior administration official denied the SBA system had crashed, and said the agency continued to process loans and add lenders.”

Per Reuters, “Since the program opened on Friday, banks have struggled to access the clunky system and the paperwork involved has changed more than once, industry sources said… Many lenders have had problems signing up for new user accounts with the SBA’s platform, while bankers who already had accounts have had issues unlocking them or resetting passwords.”

Borrowers are encountering problems online, too. Michael Witte, chief financial officer for a 67-employee company in Bowie, Md., that manages office furniture installations, says he had to fill out an online application with Sandy Springs Bank eight times before he successfully submitted it. 

“Now it’s wait and hold,” he tells me. "Im not angry with the banks. I appreciate the work they’re doing with the rules they have. There was a lot of confusion about what form to use from the SBA.”

There are signs from Washington that more help is on the way. 

President Trump bristled at a question about the program’s rocky rollout Monday but indicated he would support giving it more funding. “We're going to have to probably add more money to this to save and to keep our small businesses going and to keep the employees of those small businesses working,” Trump said. He made a similar commitment via Twitter over the weekend:

And some Republican leaders back expanding the program’s funding in a “phase four” stimulus package. The office of Sen. Marco Rubio (R-Fla.) said over the weekend “it is clear that Congress will need to appropriate additional money" for small businesses, my colleagues Erica Werner and Mike DeBonis report.

The Federal Reserve has also announced it will provide financing to participating banks to take loans off their books and ease more lending.

For small businesses, the big question remains when the money will start flowing. 

Trump said at his news conference said “tens of thousands of small businesses applied for more than $40 billion in relief,” though it’s not clear how much banks have passed along to borrowers.

Of eight small business owners and advisers I spoke to Monday, none had received funds yet. Peter Kramer, whose business manages five parking garages in Arlington, Va., managed after three attempts to submit an online loan application to TD Bank. He received an automated response informing him he can expect to be contacted in three to five business days. He says revenue slow to a trickle in March, and now he is losing money every day. “We can make it one more month and then we have to lay everybody off,” he says of his six employees.

Caroline Devoy, a Houston CPA who advises ten clients employing 272 workers, says she managed to submit applications for all of them, with six different banks. But she is counseling them not to anticipate swift action. Despite her clients’ voluminous submissions, she tells me she expects the banks “are going to come back wanting more information.”

“Everything they tried to avoid with this plan is going to happen anyway, if they can’t get this money out there,” she says.

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Market movers

Despite a trying week, markets are surging on hope the pandemic is being brought to heel.

Dow surges 1,600 points: “Wall Street made historic gains even as Americans were advised to prepare themselves for the worst of the coronavirus crisis this week,” my colleagues Taylor Telford and Thomas Heath report.

“The Dow Jones industrial average, Standard & Poor’s 500 and Nasdaq composite all skyrocketed more than 7 percent even as U.S. coronavirus deaths passed 10,000 and after the U.S. surgeon general warned that the coming week could be catastrophic, rivaling Pearl Harbor or the Sept. 11, 2001, terrorist attacks.” 

OPEC seeks to rally producers: “A growing scarcity of oil storage space is driving some of the world’s biggest crude producers to negotiate a truce this week in a Saudi-Russian fight for market share that has contributed — along with the coronavirus pandemic — to the recent oil-price rout,” the Wall Street Journal's Benoit Faucon and Summer Said report.

“As oil demand collapses amid the viral pandemic, the Saudi-led Organization of the Petroleum Exporting Countries and Russia-led allies are holding a virtual gathering Thursday to negotiate a truce in the Saudi-Russian price war and debate curbs of 10 million barrels a day. The group hopes North American producers will join, and it has invited Norway, the U.K. and Brazil to join the meeting, delegates said.” 

Credit Markets Show Signs of Stabilizing After Historic Fed Intervention (WSJ)

Money on the Hill

The outline of a potential “phase 4" economic relief package is emerging. 

“Congressional leaders and the White House are converging on the need for a new assistance package to try to contain the coronavirus pandemic’s economic devastation, fearful that a $2 trillion bailout law enacted last month will have only a limited effect,” Erica Werner and Mike DeBonis report.

“House Democrats are eyeing a package of spending increases that would ‘easily’ cost more than $1 trillion, Speaker Nancy Pelosi (D-Calif.) told lawmakers Monday... Democrats are looking to extend unemployment aid and small-business assistance for additional months, as well as authorize another round of direct checks to taxpayers." 

  • Yellen sounded the alarm to Pelosi and Democrats: “Former Federal Reserve chair Janet L. Yellen told Pelosi and House Democrats on [an afternoon] conference call that the actual unemployment rate is probably 13 percent, not the 4.4 percent the Bureau of Labor Statistics reported Friday. And Yellen said the number of new jobless claims this week is likely to exceed last week’s 6.6 million, a record, according to Democrats on the call.”

What Republicans want: “Trump has signaled support for some of the ideas that Democrats back, such as expanded help for small-business owners and new bailout checks for households. Republican leaders, meanwhile, have also called for more corporate aid and money to boost the overwhelmed health-care system.”

Coronavirus fallout

In the U.S.
  • The daily death toll in New York dropped below 600 for the second day in a row: Gov. Andrew Cuomo (D-N.Y.) pointed to the development as evidence the state is seeing a “possible flattening of the curve.”
  • State unemployment offices are struggling: “Roughly 10 million people have filed unemployment claims over the past two weeks, only to face a similar struggle: Out of work, and soon to be out of cash, they’ve encountered local governments that are unprepared to handle the unprecedented strain,” Tony Romm reports.
  • White House considering coronavirus bonds: Trump's economic adviser “[Larry] Kudlow said this was a time to sell bonds to raise cash for [virus] relief efforts and a ‘war bond’ was a great idea,” Reuters's Doina Chiacu and Susan Heavey report.
  • Peter Navarro sounded coronavirus alarm in January. Trump's trade czar said the disease could cost the U.S. trillions of dollars and endanger millions of Americans, in “the highest-level alert known to have circulated inside the West Wing as the administration was taking its first substantive steps to confront a crisis,” the New York Times's Maggie Haberman reports
  • The president continues to tout an unproven drug: “Trump’s swift embrace of hydroxychloroquine — as well as azithromycin, which he has hyped as ‘one of the biggest game changers in the history of medicine’ — illustrates the degree to which the president prioritizes anecdote and feeling over science and fact,” Philip Rucker, Robert Costa, Laurie McGinley and Josh Dawsey report.
Corporate impact
  • Boeing to suspend 787 Dreamliner production in South Carolina: The move “puts all of the manufacturer’s production of commercial airplanes on hold,” CNBC's Leslie Josephs reports.
  • Dimon is mulling suspending JPMorgan's 2020 dividend: “[JPMorgan CEO Jamie Dimon] said he sees a ‘bad recession’ in 2020, and that the largest U.S. bank could suspend its dividend if the coronavirus crisis deepens,” Reuters's Anirban Sen and Elizabeth Dilts Marshall report. He laid out his views in his annual letter to shareholders. Read it here.
  • Meat plants are now dealing with the virus: Both JBS Holdings and Tyson Foods have suspended operations at one of their plants after a workers became ill and others were afraid to show up. “The slowdowns come as the $213 billion U.S. meat industry tries to adjust to the coronavirus-forced changes to American eating habits, reorienting the flow of ground beef, chicken breasts and sausage toward supermarkets and away from restaurants,” the WSJ's Jacob Bunge reports.
  • Grocery workers are beginning to die: “Major supermarket chains are beginning to report their first coronavirus-related employee deaths, leading to store closures and increasing anxiety among grocery workers as the pandemic intensifies across the country,” my colleague Abha Bhattarai reports. Kroger, the nation's biggest chain, announced it is trying to acquire protective gear for its workers and will reduce capacity in its more than 2,700 stores by 50 percent per building.
  • SEC suspends trading over two penny stocks: Trading of the two companies, Arizona-based No Borders and Sandy Steele Unlimited Inc., was suspended “over potentially inaccurate information about their activities in response to the new coronavirus pandemic,” the WSJ's Alexander Osipovich reports.
Around the world
  • Boris Johnson is in intensive care after his symptoms worsened: Johnson has had some oxygen support but is not on a ventilator, Cabinet Office Minister Michael Gove said Tuesday. Meanwhile, he deputized Foreign Secretary Dominic Raab, "giving Raab the power if needed to run the British government during this health crisis,” William Booth and Karla Adam report.
  • Two European countries reported their lowest daily increases in cases in weeks: “Italy announced 3,599 new coronavirus cases, its lowest daily increase in around three weeks. Spain confirmed 4,273 new cases, suggesting a downward trend in two of Europe’s hardest-hit countries,” Siobhán O'Grady and Teo Armus report.
  • India will allow some hydroxychloroquine shipments: The news comes after "Trump urged Prime Minister Narendra Modi to relax India’s blanket ban on exports of hydroxychloroquine, a drug that has shown potential promise in treating covid-19 but whose effectiveness remains unproven," Joanna Slater reports from New Delhi.
  • New Zealand demoted its health minister after he violated its national lockdown: “Health Minister David Clark drove 12 miles to a beach,” my colleague Siobhán O'Grady reports. This came after Clark was spotted near a mountain bike trail, which was also during the lockdown. Prime Minister Jacinda Ardern said under “normal conditions” he would be fired.

Trump tracker

Private equity lobbies Jared Kushner for stimulus help. 

The industry is mounting a blitz to secure aid for its riskier investments. The Post's Carol D. Leonnig, Jonathan O'Connell and Michelle Ye Hee Lee: "The intense appetite among private-equity firms to get a bigger piece of the stimulus windfall has put a spotlight on the numerous ties between wealthy industry figures and Trump and his family — raising questions about potential conflicts of interest as the Treasury Department writes the rules for handing out billions of dollars in loans and grants.

“One significant connection to the industry is through Kushner, a top White House official whose family real estate company received millions in loans from Apollo Global Management, a New York-based private-equity firm. Two weeks ago, a partner at Apollo sent a personal email to Kushner suggesting steps the administration should take to ensure loans are available to firms with a wide range of risk... Such a move could benefit some private equity firms, as well as other investors that hold debts such as mortgages and commercial real estate loans.”

Trade fly-around

Trade fights continue even as the pandemic spreads.

Trump risks U.S. jobs with assistance to Apple: “The iPhone maker was exempted from tariffs levied on components it imports from China that are used in the Mac Pro desktop put together at the Flex plant,” Bloomberg News's Jenny Leonard and Ian King report. Trump visited the facility two months before the exemption announcement.

“The removal of a 25 percent surcharge on items like power supplies and printed circuit boards that house the main components of the computer lowered Apple’s costs and, according to Cook, was the reason why the Cupertino, California-based company continued its manufacturing at the Austin factory … But other companies, like San Jose, California-based Cisco, didn’t receive the same treatment. Now jobs related to the manufacture of its products are at risk.” 

E.U. to boost retaliatory tariffs amid metals dispute: “The European Union plans to impose tariffs on lighters and plastic fittings from the U.S. in retaliation over controversial American duties on imported steel and aluminum, according to EU officials,” Bloomberg News's Jonathan Stearns reports.

“The EU intends to apply a 20 percent tariff on lighters and a 7 percent levy on plastic fittings for furniture in response to a U.S. decision in February widening the scope of metal levies introduced in 2018 on national-security grounds, the officials said on the condition of anonymity.” 

Chart topper

Americans are stocking up on household staples — and guns. Via economist Adam Tooze: 



  • Levi Strauss is among the notable companies to report its earnings, per Kiplinger.


  • The Fed releases minutes from its unscheduled meetings on March 3 and March 13 when it lowered the benchmark interest rate to near zero


  • The Labor Department releases weekly jobless claims
  • The University of Michigan releases its latest consumer sentiment numbers

The funnies

Bull session