Last year the federal government pumped billions of dollars into small businesses through the Paycheck Protection Program (PPP). The program helped save thousands of businesses, but others struggled to secure money.
The government is releasing an additional amount of PPP money to these companies, and our I-Team has learned that some are still struggling to get the help they desperately need.
Cristian Pellegrini owns three Menchie’s frozen yogurt stores. When the pandemic hit last year, he closed his shops for two months.
“As for Menchie’s income, there was absolutely no income, so we had to use our reserves and savings,” said Pellegrini.
According to Pellegrini, business has slowly picked up since then, but sales are still half what they were before. He says his PPP loan – which is forgivable when the money is spent on things like payroll and rent – was a lifesaver.
“We are incredibly grateful because otherwise we would have closed our doors a long time ago,” said Pellegrini.
At first the PPP was plagued by problems. Big companies like Ruth’s Chris Steakhouse and the Lakers have devoured huge amounts of PPP money, while small companies have struggled to get some. In fact, an I-Team analysis of the program found that more than 3,000 California small businesses were getting $ 1,000 or less. Two local companies received just $ 1. Under public pressure, Ruth’s Chris and the Lakers returned their PPP money.
And now that the federal government is releasing the second round of PPP money, changes have been made to the program that will allow small businesses like Pellegrini to qualify for more money. Some changes also apply retrospectively to the first loan. But the problem: Pellegrini says his bank, City National Bank, won’t be making the changes to help him.
“It’s a huge sum of money for us small businesses. It’s $ 14,000. And I know that isn’t a lot of money for a lot of people, but it keeps my people busy for two weeks.” said Pellegrini.
Beth Milito of the National Federation of Independent Business says she hears from other small businesses who are struggling to get their banks to make the new changes.
“I have the rule here and I understand I can use this method, but my bank is telling me they don’t know how to do it or they haven’t upgraded yet,” Milito said.
Team I asked City National Bank if they were looking at Pellegrini’s loan. It told us it doesn’t comment on customer credit. Pellegrini has not heard from them.
“For me it’s the principle,” said Pellegrini. “It’s about waiting for something you’ve already done for the customer. In this case, I feel ignored, left alone.” Pellegrini requested a second
PPP loan from another lender. He is determined to look to the future with hope.
“I am completely confident that things will get better,” he said. “I believe in the small business, I believe in mechies, I believe in the community.” Small despite the problems
Business lawyers encourage business owners to apply for a loan. Congress has just postponed the application deadline to May 31st.