report

The Small Business Administration’s disaster loan program for small businesses has

gotten off to a rocky start, with businesses hit by the coronavirus pandemic complaining

about an inability to file their loan applications online.

Small-business owners and advocates, including Jen Earle, chief executive of the National

Association of Women Business Owners, said loan seekers either couldn’t gain access to the

online application site or were bounced off before they could complete their application.

In response to the complaints, the agency adopted a new system where loan seekers

download application forms and fill them out manually before uploading them onto the

agency’s site, according to business owners who are seeking loans. That change meant that

business owners who had started the process but not completed it had to re-enter their

information a second time.

The disaster loan assistance, provided through

the Economic Injury Disaster Loan program, is

among the first steps the SBA took to help small

businesses hit by the virus outbreak. The

program is separate from the $349 billion in

loan guarantees included in the coronavirus

stimulus plan passed by Congress and signed by

President Trump on Friday. The program allows

the SBA to lend up to $2 million directly to each

qualified applicant as working capital under a

measure signed on March 6. The program has

received $7 billion in available funds.

Tom Lussenhop, president of U3 Ventures, a

real-estate developer in Philadelphia with three employees, said he spent nearly eight

hours typing in information onto the agency’s online portal between a week ago Thursday

and Saturday, only to see the site crash on Sunday before he completed his application.

Since the website relaunched with a new format on Wednesday, he has been working to fill

out a downloaded application form, worrying that he might be counted twice because of the

earlier online account.

“It’s frustrating,” said Mr. Lussenhop, who expects his firm’s revenue to fall 40% in April.

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Small Businesses Struggle With SBA Disaster Loan Applications Owners can’t gain access to agency’s online site or get bounced o too soon

The normally busy Main Street in Rockton, Ill., was deserted as small businesses were closed after the state’s governor instituted a shelter-in-place order this past week.

PHOTO: SCOTT OLSON/GETTY IMAGES

March 28, 2020 8:00 am ET

By Yuka Hayashi in Washington and Ruth Simon in New York

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That’s when some of his tenants, including a restaurant, are expected to stop paying rent.

“It’s not a $10 million loan. It’s a $50,000 loan.”

Aaron VanderGalien, senior partner with Deksia, a Grand Rapids, Mich., marketing agency

that has 18 employees and has seen revenue fall by more than one-third, said the loan

application itself was confusing.

Because the loan application is designed for natural disasters, not economic ones, it asks

borrowers to estimate how much they have lost for categories such as real estate,

inventory and equipment.

“I have no idea how much money I applied for,” said Mr. VanderGalien, who completed his

application March 20. “There is nowhere to put any amount in.”

Tony Wright, the owner of WrightIMC, a digital marketing agency in Dallas with 15

employees, called the SBA’s helpline after he was locked out of the system on Tuesday.

He was told he was number 757 in the queue; the wait was about 2 hours and 45 minutes, he

said.

Once he was reinstated, Mr. Wright said he spent seven hours working on his application

before he finally gave up for the day. He spent Thursday re-entering the forms and then

submitting the PDF, after the SBA had changed its process.

“I only received a confirmation on the website that the forms were submitted,” not an

email or other notification, said Mr. Wright, who figures business is off close to 50%. “I hope

they are not lost in the ether.”

Write to Yuka Hayashi at [email protected] and Ruth Simon at [email protected]

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