Almost 350,000 loans made to small businesses in 2020 during the Covid-19 pandemic haven’t been forgiven, according to a Bloomberg News analysis of Paycheck Protection Program data, and most of them are for less than $25,000.
That lingering debt – about $28 billion, the analysis shows – is creating a burden for the smallest businesses, including many run by minority entrepreneurs, say advocacy groups, community leaders and business owners. Many are struggling with the process of seeking forgiveness under terms of the loan program that distributed more than $800 billion over two years.
Unlike traditional loans, those given as part of the pandemic relief program can be forgiven if certain conditions are met. Proceeds had to be spent on payroll and other eligible expenses within a designated time frame, for example. But some borrowers who say they meet the criteria are struggling with technical snafus, onerous documentation requirements and confusing websites.
Angela Thompson, owner and chief executive officer of a property renovation company based in Jacksonville, Fla., first applied for forgiveness for her $172,000 PPP loan in . Over a year and more than 100 calls to loan providers later, she’s gotten several notices saying she’s on the hook to start repaying the debt.
Initially, she applied for forgiveness via Kabbage, the online lender that had given her the loan. (más…)