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Paycheck protection program explained

Local News

BAKERSFIELD, Calif. (KGET) – Because of the pandemic small businesses are being forced to temporarily shut down and owners are struggling to come up with cash to keep them running. 

The federal government introduced the paycheck Protection Program to help them. 

The Paycheck Protection Program or PPP was introduced on March 27. It provides loans to small businesses to help them stay afloat. But, the applicants we spoke to say the process is kind of slow.

Dennis Farmer, chief executive officer at Legacy Village, submitted his application for the paycheck protection program on April 6th, they told him it would take 3 to 5 days to process. It’s been 9 days and he still hasn’t heard back. 

“It wasn’t an arduous process, but we just haven’t heard back yet,” said Farmer.

We asked David Anderson, owner of Moneywise – a financial services company about the delay.

“The economic devastation is so large that it is overwhelming the system,” said Anderson.

He says most people are experiencing delays.

“Our business has applied for one and we haven’t received it,” said Anderson. “So it just kind of depends on the bank and your specific situation.”

Farmer runs Bakersfield’s only rehabilitation facility for veterans. They shut their doors on March 26. Without a loan, they don’t know if they can open back up.

“It’s going to allow us the resources to bring back the staff that was laid off and continue functioning for a couple of months,” said Anderson.

The PPP provides $349 billion in forgivable loans to help small businesses.

The maximum loan granted from the PPP will be equal to 2.5 times the average payroll costs for the previous calendar year, up to 10 million dollars. 

Loans will be forgiven in full if certain requirements are met.

The program is open until June 30, but the treasury department says business owners should apply as quickly as they can because of funding caps and the time needed to process loans. 

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