Banks Overwhelmed By Stimulus Demand

PHILADELPHIA (WPVI) -- Roofer Kevin O'Donnell has half his workforce on the sidelines, while the other is half working on jobs that were granted state waivers.

"It's stressful for sure. I am confident I can get through a month of that, but after that I am going to have to start cutting costs," he said.

He applied for the Payroll Protection Program on Monday. It's a $350 billion forgivable loan program by the federal government to deal with the fallout of COVID-19.

When he'll get any money is unclear.

"I am 12th in line with just my accountant to file this loan. Who knows how many people are in front of us in the bank," he said.

Here's how it works: Small businesses borrow federally back loans through the Small Business Association. Payback is deferred for six months.

But if 75% of the money is spent on payroll, the loans turn to grants.

"If you are a restaurant and already laid off your workers, you need to hire back those workers and keep them on payroll," said economist and small business owner Adam Ozimek.

Ozimek says demand is already putting stress on the program

"It's not going to be enough. Just Bank of America alone - 10%, in two days - so pretty soon we are going to need to go to Congress for more," he said.

Larry Krain applied Friday when the program launched. He says his bank knew little about the details. Now he is waiting to hear word back.

"I was concerned because it's first come first serve basis and we tried to get in early," he said.

Ozimek says he believed the loan forgiveness parameters were broader. Businesses can use the money for eight weeks, and that he says is a problem.

"That means when that eight weeks is up and your state won't let you open, you have to keep those workers on payroll even if you are unable to stay open," he said.

Some small business owners tell Action News they believe some of the bigger banks are favoring certain customers.

If this describes your bank, then you have several choices:

-You can wait until your bank starts accepting PPP loan applications

-You can try to open a new bank account elsewhere;

-You can apply through another participating SBA 7(a) lender. There are some companies that specialize in small business loans that have already streamlined the application process for this program.