Payroll Protection Program Chicago Dance Studio Wants Small Business P3 Loan: 100,000 Upfront

Congress sent an additional $ 320 billion to a very popular and quickly sold out COVID-19 loan program on Thursday, although the Glenwood Dance Studio in East Rogers Park is far from getting the money.

Sandra Verthein, the dance centre’s board chair, said Chase, the dance centre’s bank, told her there were at least 100,000 applicants ahead of her.

A sign on the storefront closed studio near Morse Avenue L stop on the red line reads: “We hope to dance with you as soon as possible”, but in Verthein’s experience, the PPP dance could be called freestyle frustration.

After President Donald Trump signs the bill, the new money will replenish the paycheck protection program – known as PPP – created to give small businesses and nonprofit employers a lifeline. financial as the economy melts due to coronavirus lockdowns. The original $ 346 billion credit was exhausted within two weeks.

Verthein’s quest to secure a coveted PPP loan for the nonprofit studio at 7017 N. Glenwood Ave. is sadly emblematic of many frustrated employers and independent contractors – and is an example of a well-meaning program that has worked. for some and probably maybe not for others. That is, unless Congress adds a third round of funding.

There is a growing demand for loans because if they are used as intended, to meet the payroll and to pay certain operating expenses, they do not have to be repaid.

Banks of the dance center in Chase. The account is too small to be connected to a personal banker.

Verthein submitted an application on April 9, three days after Chase opened his PPP website, requesting a very small loan, $ 5,750. This represents payments for 2.5 months to the 10 part-time dance teachers. She lost a few days due to difficulties in applying online.

The Small Business Administration stopped receiving applications on April 16, after approving loans for the entire credit of $ 346 billion.

On April 19, Verthein received an email from Chase, which she shared with me. Chase noted that the PPP funding was exhausted. Even though others came in, “We want you to know that there are over 100,000 applications in front of you at Chase, depending on when you submitted your application.”

At 7:45 p.m. on Wednesday, Chase sent Verthein another email ahead of Thursday’s Congress approving a second round of PPP funding. However, Chase said, “We expect funds may run out quickly again.”

The dance center’s application was still in the first stage and was never even sent to the SBA for review.

“We know how important these funds would be to your business. We wanted to give you that information, so you can decide if you want to try applying with another lender, ”the email from Chase said.

Verthein and I discussed recent stories revealing how banks give special treatment to their best customers, even though the official line is ‘first come, first served’.

Banks play a crucial role, since the SBA depends on banks to submit PPP applications and put the money in place. Banks determine who gets help to quickly complete and submit an application. This gives lenders considerable influence over the distribution of PPPs. Banks receive a fee for their work – a percentage of the loan.

The new funding is $ 310 billion for loans plus about $ 11 billion for administrative costs.

Verthein said to me: “My feeling is that if we are so far from the line for a place where we applied on April 9, what is the point of applying now with another bank where we will be further away? “

The Senate in a voice vote on Tuesday and the House in person – albeit socially distanced – voting on Thursday approved additional funding for the PPP loan as part of a $ 483 billion coronavirus funding.

Among the Illinois House members, 4 Republicans and 12 Democrats returned to Capitol Hill and voted yes. Rep. John Shimkus, R-Ill., And Rep. Dan Lipinski, D-Ill did not vote. Lipinski said in a statement that as a type 1 diabetic, his doctor advised him not to travel.

Rep. Jesus “Chuy” Garcia, D-Ill., Told me that he believed banks were “passing their favorite customers.” Representative Adam Kinzinger, R-Ill., Said there were problems in part because Congress and Trump wanted the money to come out quickly. “Thinking through all the nuances, details and questions would probably have taken longer than we did,” he said.

The new legislation addresses some of the patronage issues by setting aside $ 60 billion for community banks and other smaller lenders, including qualifying “minority depositories”.

But it does not help Verthein if the newly filled well will soon be dry.

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