How much are stimulus loans helping today’s most innovative companies? Not much at all.
In a new survey, Fast Company asked small businesses on our Most Innovative Companies list about their experience with the various relief programs available in the wake of the coronavirus pandemic. Of the 56 small businesses that responded to our survey, 60% said they are accessing stimulus loans—and none of them have received a dime yet. Nearly all are applying for loans through the Paycheck Protection Program, and another 38% for Economic Injury Disaster Loans. “No money is moving,” said one respondent.
Getting no money has been time-consuming. A number of executives have resubmitted applications, or have been unable to submit applications due to crashing websites and system errors. “We applied for the EIDL loan as soon as we could in mid-March, only to learn recently that our application was not valid,” said one respondent. Others haven’t heard back yet: “no responses as of yet.”
A few needed outside help. “Determining our eligibility for the programs was so unclear that we needed to consult external counsel,” said one company. Others concurred: “confusion,” “directions and definitions unclear.”
The survey included companies of up to 500 employees, the limit for qualifying for small business relief. Their experiences mirror those of sole proprietors, self-employed individuals, and independent contractors, many of whom have had a difficult time finding lenders who will even work with them.
But the biggest problem expressed by our survey respondents was the lack of funding—a full month after the first loan programs opened, including the EIDL, which was supposed to provide a $10,000 advance to hold up companies. Thus far, a quarter of the companies in our survey group have had layoffs, and three companies have laid off more than half their workforce.