Small Business Owners Left Confused, Worried After Not Securing Paycheck Protection Loans
LOS ANGELES (CBSLA) -- Small businesses across the Southland are feeling the strain of being closed for weeks due to the coronavirus pandemic.
Loans from the federal government were supposed to provide a lifeline for small business owners to keep their operations afloat. Many are frustrated from being left out of the $349 billion federal paycheck protection program, while larger competitors get huge financial infusions.
The owners of Miss Melodee dance studio in the San Fernando Valley did not receive a loan, despite applying the morning the applications went live. They are trying to stay afloat using virtual dance programs, but with their studio space closed they are worried they'll have to lay off their staff.
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"I don't know how we can survive," said co-owner Scott Bridges. "It's going to be very difficult. We've experienced a 92 percent drop off in income."
On Friday, it was revealed that nearly $30 million in small business loans were doled out to to the owners of Ruth's Chris Steakhouse and the company that owns Potbelly Sandwich Shop chain.
"It's not really anger, as much as it is just concern and fear," said Jeff Kyle, who owns Cookie Cutters kid hair salon in Manhattan Beach.
Kyle also applied for a PPP loan, but didn't secure any funds.
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"I got an email saying, 'sorry, the funds are out, but you were approved,'" he said.
These business owners are left confused as to why larger corporations are getting millions, while they have nothing.
"We're a family business, and we don't have departments that can crunch numbers and get to the front of the line," Bridges said.
As of Thursday, the $349 billion federal aid package had officially run out. Until Congress makes a new deal on new loans, no more funds will be available.