CBS 58 Special Report: Paycheck Protection Program loans
THIENSVILLE, Wis. (CBS 58) – The Paycheck Protection Program reopened April 27 after Congress refilled it with $310 billion. The first $350 billion ran out within two weeks earlier this month. Companies like Shake Shack, the Los Angeles Lakers, and the Marcus Corporation here in Milwaukee have been able to get loans, leaving some small businesses fuming. Both the Lakers and Shake Shack returned the loans they were awarded.
Around 43,000 loans were approved for Wisconsin businesses during the first round of the PPP program. That’s 41 percent of the businesses with under 500 employees around the state. But thousands more are hoping help is on the way.
“We’re out there trying to help nonprofits raise more money for their causes,” said Better Bidders owner John Murphy.
Murphy started his company 17 years ago after helping his kindergartner get auction paddles for a school fundraiser.
“I started looking and I couldn’t find anything, and what I did find, I thought was kind of garbage,” said Murphy.
From his one man shop, he designs, makes, and sells hundreds of styles of auction paddles. His customers include Sotheby’s and thousands of nonprofits.
“It’s the who’s who, from the smallest 4H to, I think I do 30 or 34 different American Heart Association chapters, for example,” said Murphy.
But the day President Trump made this pandemic real on March 13 declaring a national emergency, Murphy’s sales plummeted.
“From that day, literally, zero sales,” said Murphy.
He’s been trying to borrow $20,000 as a financial lifeline, but no help has come. The Wisconsin branch of the National Federal of Independent Businesses said Murphy’s experience is not unique.
“From the beginning we didn’t like that 500 employee benchmark,” said Wisconsin NFIB Director Bill Smith.
Smith said businesses have experienced application problems and payment black holes, causing lots of uncertainty. News reports of public companies getting PPP loans have only added to it.
“We can add the word frustration,” said Smith.
“If you’re publicly traded, are you kidding me? I can’t even get a line of credit at the bank,” said Murphy.
Congress included a carve out of hotel and restaurant chains, allowing them to apply for loans as long as their individual locations had less than 500 employees. That infuriated Murphy.
“The whole point with a publicly traded company is that the shareholders take the risk by virtue of them owning the company,” said Murphy.
He has two more orders he can fill, but with so much uncertainty surrounding when his customers can ever hold galas or auctions again, he’s watching his checking account circle the drain.
“The money needs to go to the small guy because we don’t have a choice, there aren’t other options out there for us,” said Murphy.
Wisconsin Senator Tammy Baldwin sent a letter to the U.S. Small Business Administration urging it to ensure PPP loans go to companies that need them, but Congress did not alter the hospitality industry carve out when it added the new money.