Federal emergency funds designed to stabilize small businesses devastated by the COVID-19 pandemic were gobbled up within days of being allocated. The trouble was, officials acknowledge, some money was taken by entities that didn’t really qualify for it.
Suffolk County Legislator Bridget Fleming saw it firsthand, as constituents were forced to close the doors to their businesses because they couldn’t get a piece of the initial round of funding for small businesses, passed as part of the $2 trillion COVID-19 relief package, to minimize financial loss. She hosted a webinar with Bernard Ryba, director of the Small Business Development Center at Stony Brook University, April 22, to discuss the second round that’s underway.
“Mistakes were absolutely made with how the first round on money was distributed,” Fleming said April 24. As it turns out, even administrators of the program agree with the legislator’s assessment that well-connected large corporations are getting millions while cultural organizations and nonprofits still search for hyperlocal help. Many though, like large hotel and restaurant chains, were unaware they had done anything wrong until notified. The initial loan rollout was marred by bank errors or indifference, and a cumbersome approval process. Some of the money has since been returned.
Another $484 billion in aid against the novel coronavirus was finalized in Washington, D.C. on April 21. Fleming said she will make her office available to offer guidance and work with the Stony Brook development center for the same purpose.
The U.S. Small Business Administration and thousands of its affiliated banks were overwhelmed by an unprecedented crush of applications, forcing a temporary halt to some lending activities.
“Although the programs succeeded in quickly pumping hundreds of billions of dollars into an economically-devastated business community, many small companies are still awaiting funds,” Fleming said. “The devastating impacts of the pandemic to small businesses is so widespread that it calls for vigilant efforts to ensure the money goes to businesses it’s meant to protect.”
Ryba has over 30 years of business experience, including public accounting, 15 years with Pfizer, Inc., and exposure to brokerage and high-technology industries. He achieved New York and national recognition as New York State’s Small Business Development Center state star financial advisor of the year.