Jewelers say COVID-19 loan rollout has been difficult – JCK


Thousands of jewelry stores have been forced to close as part of nationwide attempts to slow the spread of COVID-19, and now many of them are awaiting repayment of government loans offered by the Small Business Administration.

The $ 350 billion Paycheque Protection Program (PPP) was created by Congress from the CARES Act passed on March 27. If companies demonstrate that they have used 75% of their PPP loans on the payroll, the loans will turn into grants that they will not have to repay. (See more information here.)

The CARES package also indicated that any business that applies for an SBA Economic Disaster Loan (EIDL) will automatically receive a repayable advance of $ 10,000, whether or not it is approved for a larger loan. (See more information here.)

Deployment of PPP loans began on April 3, when banks started accepting applications, and has been difficult.

The government initially claimed that the payments could be available the very day they were requested. But, in fact, banks have been slow to disburse loans, even after approving applicants. Why? Some banks are unclear on the program’s rules and have asked for clarification on their terms, leading to slowdowns. (For example, the PPP interest rate was initially charged up to 4%. Then it became fixed at 0.5%. Now it is 1%.)

Additionally, NBC News and other media have reported that online banking interfaces have been overwhelmed by thousands of PPP applications, interfaces not designed to handle such large influxes of data.

Harris Botnick, co-owner of Worthmore Jewelers in Atlanta and Decatur, Ga., Said he applied for a PPP loan on Friday, but the application process was “extremely aggravating and time-consuming.”

“We have a very strong banking relationship and our bankers are spoon-fed information on the necessary documents,” he says. “Once they ask for certain information, a lot of it changes the next day. We deal with two separate banks for each of our stores, and it has been the same in both banks. “

In an email Tuesday night, he said he had no idea when the funds would be available. Still, the retailer clings to his team, saying, “They’re there for us every day, and we’re going to be there for them now.”

Applicants also reported that they had been refused loans because they were in Well standing with their banks.

Bank of America in particular has drawn a lot of anger from potential candidates since Friday. One of these business owners, Sarah Leonard Jewelers in Los Angeles, tweeted April 3, “Shame on you Bank of America. We have been doing business with you for over 70 years and today you turned us down for government P3 funding because we never needed to borrow extra money from you. Fix this NOW and save my business along with hundreds of others !!! “

Dan Sink, president of Sink Jewelers in Arancum, Ohio, says he has “reviewed the application at least four times while speaking with my CPA and the vice president of the bank. We still struggled to figure this out as each bank adds its own set of guidelines. Without the luxury of time.

Christina Gandia Gambale, co-owner of Greenwich St. Jewelers in New York, waits for a banker to call her to initiate the application process. But she also wonders what happens after the eight weeks of PPP coverage and business is not returning to pre-COVID-19 levels.

“As we’re still figuring out the details, I’m not sure anyone really has all the answers yet,” she muses.

Jillian Hornik, sales manager for Jae’s Jewelers in Coral Gables, Fla., Initially had no luck applying for a loan, despite several attempts.

“Our bank [Wells Fargo] is no longer accepting applications and has stated that they would likely run out of cash before they get to us. No one else picked up the phone.

She eventually opened an account at another bank and was able to complete a PPP application just in time. “They told me that they would most likely stop taking requests tomorrow because all of their funds will be allocated,” she said.

Other jewelers had no trouble filling out the forms, but still don’t know when they’ll receive the funds.

Laura Stanley, owner of Laura Stanley Personal Jeweler in Little Rock, Ark., Found it “very easy” to apply for the P3 loan. “My payroll company offered to put all the paperwork together, which I gladly paid them $ 50 for. I received confirmation that my request is in place. I am waiting to learn more.

Amy Johnson, owner of Johnson Jewelers in Puyallup, Wash., Is also in limbo. She applied for an EIDL loan last week, but she “[hasn’t] had no response other than a request number was generated.

She also applied for a PPP loan last Saturday. “Even though it wasn’t very difficult, it looks like a waiting situation with no specific timeframe. So I wait, but I have high hopes.

Gordon Robbins, owner of Robbins Delaware Diamonds in Newark, Delaware, also applied for both the EIDL loan and the PPP. The EIDL application process was “quick and easy,” he says, and while he was supposed to receive his $ 10,000 grant in three days, he’s not counting on it. “Now I hear it will probably take weeks,” he says.

He also applied for a PPP from TD Bank, although the form was so “glitchy” that it took over an hour to complete. Yet if he gets the loan, he doesn’t complain.

“It’s a lifeline for me,” he says. “If that happens, my employees will have two months of uninterrupted pay. I’ll jump through any hoop I have to. It is the obligation of every business owner to spend as much time as possible jumping through these hoops.

Of Robbins’ 13 employees, three have chosen to go unemployed because of the provision in the CARES Act that grants laid-off workers an additional $ 600 per week. But like other funds promised by the government, these employees have not yet received the additional $ 600; in some states, receiving additional unemployment benefits can take weeks, according to reports.

Larry Rickert, owner of Jim Kryshak Jewelers in Wausau, Wisconsin, submitted his PPP request after providing “full documentation” to his bank. And although he hasn’t received his loan yet, he has friends at other companies who have.

“It varies from bank to bank. Many of them see this as a risk because the banks are not set up to give quick loans without verification. I can see that there is a variable appetite to cope with, especially if it is an unknown customer. I know my bankers, but not everyone has this.

“My feeling is that eventually everyone will receive their funds, but for some people it will be an extremely long process. There will be a lot of glory and horror.

And even after reading a lot about the program, Rickert still has a lot of questions.

“Let’s say you get your money on April 15th. The clock then starts and [covers your payroll] for the next eight weeks. This means you are done on June 15th. Then you have to see: have they changed the rules? Have they changed the rules? And who knows what the business climate will look like at that time.

Rob Bates and Emili Vesilind wrote this report.

(Photo: Getty Images)

Follow JCK on Instagram: @jckmagazine

Follow JCK on Twitter: @jckmagazine

Follow JCK on Facebook: @jckmagazine

Leave A Reply

Your email address will not be published.