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Arizona Small Businesses Still Waiting For Federal Aid

By Lauren Gilger, Mark Brodie, Amanda Luberto
Published: Monday, April 27, 2020 - 12:58pm
Updated: Tuesday, April 28, 2020 - 8:54am
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Many small businesses around Arizona are still waiting for federal aid. 

The first round of loans from the federal Paycheck Protection Program (PPP) to help small businesses have been issued. But, the nearly $350 billion distributed in the first round quickly ran out, so Congress approved another $321 billion to be distributed starting Monday. 

The first round of loans was plagued with technical issues and criticism that larger businesses like restaurant chains and construction companies were prioritized over small, local businesses. And Kimber Lanning with Local First Arizona says large banks will often work with larger businesses on more substantial loans because they’re more profitable.

“So what happened when the PPP became available and those banks decided to only work with businesses that had existing loans, it automatically skewed to the larger businesses that would even qualify for loans of that size," Lanning said.

Georganne Bryant runs Frances Boutique in Phoenix and is still waiting for her loan. She says while she’s fortunate enough to have some reserves, this time of year is usually when she prepares for the much slower Valley summers.

“Right now, March, April, and May are a big gift giving season and also set us up for our summers here in Phoenix so to miss out on that ... that’s where the loan is really going to come in,” Bryant said.

Bryant says it’s devastating to her that some big businesses got the majority of the first round of funding because she sees small businesses as the core of our community. But this isn’t the first economic crisis she’s seen since her boutique opened 14 years ago.

“I remember in 2008 with the downturn, people were really making an effort to shop local and shop with us because they really wanted us to be here in the end and that’s the same exact thing that’s happening now," Bryant said. "And I’m hopeful that that’s happening with all my other small business friends.” 

Erin Westgate owns Songbird Coffee and Tea House in downtown Phoenix and also hasn’t received her PPP loan at this point. She says the process has been confusing even to apply through her bank.

“But then their confirmation email saying that they actually received the application said we got it, don’t contact any of our bankers because they can’t tell you anything," Westgate said. "So then it was just kind of sitting around. And then probably about a week ago I was told I was at stage two, which meant they were actually looking at my paperwork. So all this time passed and the funds were depleted before they were even looking at it."

Westgate also recognizes the looming summer is a concern but is grateful for loyal regulars she says are the only thing keeping her business afloat. She says more than anything this time has been very emotional.

“It’s just non-stop, trying to find grants, trying to find funding" Westgate said. "Trying to find out as much about the PPP loan, trying to decide how many times we should apply and with what different banks or credit unions. It’s just, we’re in the dark.”

While the second round of funding for small businesses is seen by many as a positive step, there are still fears that it still won’t be enough to help. The community development group Chicanos Por La Causa is trying to help small business owners get access to loans during this time.

The Show spoke with David Adame, the president and CEO of Chicanos Por La Causa, to hear more about this endeavor.

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