Firms fear small business loan program in coronavirus rescue package will run out of money

Marlin Steel Wire Products is busy making wire racks for covid-19 test kits. Still, the company is going to pursue a paycheck protection loan because of concerns clients will stop paying their bills or slow buying because they are strapped during the coronavirus pandemic.  

“I never want anything bad to happen to my awesome employees. So for that reason, we’re going to take the conservative approach, we want to protect our people,” said Drew Greenblatt, CEO of Marlin Steel. 

The Treasury Department issued guidelines Tuesday about the $349 billion paycheck protection program, part of the $2 trillion coronavirus rescue package signed into law last week. The aim is to make sure small businesses can continue to pay their workers through the pandemic disruptions.

Organizations can apply for a loan through a Small Business Administration Lender beginning April 3rd. The loans will be forgiven as long as the money is used to keep employees on the payroll and other expenses like rent, utilities and mortgage interest. 

Smith Richardson is a specialty parts maker based outside Chicago. The company has been putting in overtime making parts for ventilators, and the commercial aviation and transportation industries. Even though business is keeping his team of 53 busy now, his accountant advised him to consider applying for the new loans.

“We don’t need to but you know the way that was written, the Payroll Protection Program, we’d kind of be foolish not to,” said Smith Richardson CEO Richard Hoster, “It’s almost free money.”

Article source: https://www.cnbc.com/2020/04/01/small-businesses-grapple-with-paycheck-protection-program-in-stimulus.html