Small businesses in the Valley struggle to survive as federal loans dry up

FRESNO, Calif. (KFSN) -- A lot of small businesses already struggling to survive during the coronavirus crisis got more bad news this week when a federal loan program ran out of money.

"We applied for 17 different clients within five days of the application opening," said financial strategist Tiffany Hudson. "Only two were approved."

In the week before opening day for The King and I at Roger Rocka's, the cast was ready to go.

But a Fresno city 'shelter in place' order shut down the show before it started.

Weeks later, a glimmer of hope appeared in the Paycheck Protection Plan, the PPP, $349 billion in small business loans coming as stimulus designed to keep employees at work.

Good Company Players usually has about 25 employees plus more when their plays are running.

They furloughed some staff already, but thought the PPP could help them stay afloat.

But their application went nowhere before the money disappeared, even as they watched bigger small businesses talk about getting big bucks.

"The reality of where you are in the essential food chain and how little people get eaten by big people," said Good Company Players founder Dan Pessano. "I think that's an element of frustration and adds to a lack of control."

The Clovis fine dining restaurant Trelio ran into a similar brick wall.

"We were ready," said owner and chef Chris Shackelford. "We had all of our paperwork. We had everything PDF filed, everything ready to go the day of. Our bank, which is a larger bank, was not ready for it."

They shopped for other banks, but got rejected since they didn't already have a relationship with those banks. Their original application got accepted hours after the funding dried up.
Congress is working on additional funding for the program, but the parties are arguing over the details.

Hudson, the financial strategist, tells her business clients to move forward as if there will be a new pot of money.

"Plan for the worst but hope for the best," she said. "Keep filling out the applications if you haven't done so. Work with your lender. See if there's any documentation you can provide to make it easier to process."

She says each lender is different, but she says small business owners can start with this paperwork:

For organizations who file Tax Form 940

  • Tax Form 940 for 2019
  • Tax Form 941 or Payroll Processing records for Q1 2020 (period including 02/15/2020)
  • Most recent tax return
  • SS4 (Notice of EIN)

  • For sole proprietors or self employed (do not file Tax Form 940)

  • 1040 Schedule C for 2019
  • Draft 1040 Schedule C for 2019

  • All others

  • Form 1099-MISC for 2019

  • But time is of the essence for small business owners trying to make adjustments just to pay the bills.

    Trelio started doing takeout for the first time ever, but income is down 85% and they've gone from about 12 employees to one.

    "I just want to make it to the point where we open back up and get to continue doing what we were doing and figure out how we're going to make it through the rest of it," Shackelford said.

    For Good Company at Second Space and Roger Rocka's, the show also must go on.

    "We're gonna keep going," Pessano said. "I'm not quite sure how, but we're gonna keep going."

    But it's hard to know now what we'll see when the curtain finally comes up.
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