Last year the federal government pumped billions of dollars into struggling small businesses through the Paycheck Protection Program, or PPP. The program helped save thousands of businesses, but others struggled to secure money.
The government is releasing another batch of PPP money to these businesses, and our I-Team learned some are still struggling to get the help they desperately need.
Cristian Pellegrini owns three Menchie’s frozen yogurt shops. When the pandemic hit last year, he closed his shops for two months.
“As far as the income for Menchie’s, there was absolutely no income, so we had to tap into our reserves, our savings,” said Pellegrini.
Pellegrini says business has slowly picked up since, but sales are still half of what they used to be. He says his PPP loan – which is forgivable if 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 long ago,” said Pellegrini.
At first, the PPP was plagued with problems. Big companies, like Ruth’s Chris Steakhouse and the Lakers, gobbled up huge amounts of PPP money, while small businesses struggled to get any. In fact, an I-Team analysis of the program found more than 3,000 California small businesses received just $1,000 or less. Two local businesses received just $1. Under public pressure, Ruth’s Chris and the Lakers returned their PPP money.
And now, as the federal government is releasing round two of PPP money, it’s made tweaks to the program that will allow small businesses, like Pellegrini’s, to qualify for more money. Some changes are also retroactive to the first loan. But the problem: Pellegrini says his bank, City National Bank, won’t make the changes to help him.
“For us small businesses, it’s an enormous amount of money. It’s $14,000. And I know that’s not a lot of money for a lot of people, but that keeps my people employed for another two weeks.” said Pellegrini.
Beth Milito with the National Federation of Independent Business says she’s hearing from other small businesses who are struggling to get their banks to make the new changes.
“I have the rule here, and I understand that I can apply this way, but my bank is telling me they don’t know how to do it or they haven’t upgraded yet,” said Milito.
The I-Team asked City National Bank if it’s looking into Pellegrini’s loan. It told us it doesn’t comment on clients’ loans. Pellegrini hasn’t heard from them.
“To me, it’s the principle,” said Pellegrini. “It’s servicing something you’ve already done for the client. In this case, I’m feeling ignored, left alone, on my own.” Pellegrini applied for a second
PPP loan with a different lender. He’s determined to stay hopeful about the future.
“I’m completely confidentthings are going to get better,” he said. “I believe in the small business, I believe in Mechie’s, I believe in the community.” Despite the problems, small
business advocates encourage business owners to apply for a loan. Congress just pushed back the deadline to apply to May 31.
Source: NBC Los Angeles
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