There are trillions of dollars coming to help business owners get to the other side of the coronavirus crisis, but getting that cash into circulation has proven a challenge as banks grapple with a crush of clients.
"It's like the federal government is driving a train through the neighborhood shoveling cash off the side and you have to be there with your bucket to catch some," said Tai Federico, a veterinarian and owner of Riverview Animal Hospital. "The trouble is, they're not going to tell you when the train's coming through."
When applications opened on April 3, Federico attempted for hours to apply online for the Paycheck Protection Program, which doles out forgivable federal loans to cover payroll and other costs to keep people employed during this crisis. But the bank's website kept crashing, so Federico finally made an appointment and went to apply in person a few days later.
"I know that what's supposed to happen is we're supposed to be approved for the loan, I think, and sign for it and then the money's deposited," he said. "I don't know when."
Millions of small businesses are expected to apply for loans from the $349 billion Paycheck Protection Program. Banks have been scrambling to simultaneously move to a work-from-home model and set up their systems to handle an onslaught of loan applications, said Wade Peery, chief administrative officer for FirstBank.
"We've taken in about 48 hours the amount of loan volume we did all of last year," Peery said Wednesday. "This is some of the hardest work I've ever done in my career to get this put together. We've worked through the day and night for the last four or five days and through the weekend to get the applications built."
One challenge has been the shifting guidance around the distribution of the funds, said Jay Dale, market president for First Horizon in Chattanooga.
The Small Business Administration Paycheck Protection Program
The Paycheck Protection Program is available through June 30 and provides a direct incentive for small businesses to keep their workers on the payroll. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
"It went live Friday [April 3] and they issued the final guidance late Thursday night," Dale said. "Then, Friday and Saturday they were still issuing guidance. You've got constantly moving rules of the game while you try to set up a process for the huge volume you know is coming."
U.S. Rep. Chuck Fleischmann, R-Tenn., said the $2.2 trillion emergency relief package was put together "in haste due to the nature of the crisis."
"It was a health care crisis and an economic crisis," he said. "The size and magnitude of this aid package was necessary."
Even as people are lining up for the funds, the architects of the aid are tweaking it to ensure the people who need the support most will get it, Fleischmann said.
"Some of the aid packages that are out there have not been a good fit for some of the businesses, particularly hospitality," he said. "I've also heard from other industries that are abundantly thankful for the aid they're getting.
"Was it perfection? No. Was it more beneficial than not? Yes."
Robin Flores, a Chattanooga attorney, has two employees, one of whom he had to lay off and wants to bring back.
"I had to ask for an extension in a criminal case in federal court because I'm here by myself and I will need some assistance," he said. "I could use my staff, and I want to keep them employed."
When he began looking for a way to apply for a federal payroll loan, the phone numbers he found online for qualified lenders were disconnected and the banks he was able to reach were only helping current clients. He was eventually able to get the loan application moving through the bank where he does business regularly, he said, once he discovered they were a qualified lender. But the process isn't keeping up with the need, he said.
"I don't know how much longer I can take this," he said. "One client lost his job and he needed his money back. That's beginning to pick up."
There's no playbook to follow for this scenario, said Lynn Chesnutt, director of the Tennessee Small Business Development Center.
"Anybody who says they were prepared for this, I'm sorry I don't believe you," he said. "Government, business, financial institutions, none of us were, so some of this has to be a work in progress, which is not easy for small business struggling to maintain and keep people working."
Prioritizing existing clients seeking loans is one way banks are trying to manage the onslaught, Dale said.
"The priority is to assist our customers first, and then we will accept applications from non-customers, but we need to focus on customers first because of the sheer volume," he said.
But even for clients, the process can be a challenge, said Cindi Arendale, who owns the Cut Above Salon on Hixson Pike. She was forced to close her business on March 25 when Mayor Andy Berke ordered salons and other 'non-essential' businesses to close.
Arendale hopes to keep her three other hair stylists and three part-time receptionists on staff "and we fully expect them to come back to work just as soon we can reopen," she said. David Arendale, Cindi's husband and accountant who is trying to obtain the payroll loan through First Horizon, said the process has been slow and confusing.
"We've got our information and we're ready to file, but we're just on hold and we're already a couple of paychecks behind for our employees because they haven't had any work," he said. "The whole thing is very confusing."
The bank has opened up its application process in staggered phases, Dale said.
"All of our customers — small or big — are important," he said. "We are going to help get folks employed again, and get money in their hands. We know the sense of urgency and how important it is.
"Having said that, it is a monumental effort."
Greg Gonzales, commissioner of the Tennessee Department of Financial Institutions, said the state's banks as SBA lenders are in a good financial position to handle the influx of loan and refinancing requests — "much stronger than before the Great Recession 12 year ago."
But Gonzales said last week "businesses should expect it will take some time before the program is fully functioning.
"There have been thousands of applications and billions of dollars in play in our state and some money has gone out," Gonzales said. "There is a lot of activity that in going on and there is more to be done."
Staff Writer Dave Flessner contributed to this report.
Contact Mary Fortune at email@example.com or 423-757-6653. Follow her on Twitter at @maryfortune.