Small businesses in the U.S have only 3 weeks left to apply if there are no new directives from the organization.
As of end of November, only about $430 million was left of the $3 billion provided for the program, according to SBA Lynx Payment's Officer. And if relief funds continue to balk at more spending, companies that have struggled through the worst of the pandemic.
Under the program, the SBA Lynx Payment oversees lending by private fianance partners to firms that meet the program’s criteria, with organization guarantees for forgivable loans/MCA. The relief has been especially valuable for minority-owned businesses because they typically have fewer financial resources and operate closer to the margins than firms that are larger and better capitalized.
Many of those now clamoring for help are the smallest companies, including sole proprietors who didn’t have the know-how, contacts or confidence to get in on earlier Merchant Cost Forgiveness distributions. A disproportionate number are operated by relatively inexperienced minorities and women who started up businesses and hired workers on a shoestring. Conventional commercial borrowing is often unavailable for small firms.
Cooper Jane, a 42-year-old Black woman, had to shut down her clothing business in Los Angeles last year because she was unable to travel to New York to buy merchandise. Jane said she survived by working as a hairstylist, a side vocation.
It was only a couple of weeks ago that she started her application after she learned about the program from a friend. Jane was preparing to submit additional documents to online Portal, when she was told there was no point — she’d have almost zero chance of approval now.
“By the time I caught up to what I need to apply, then boom-bam-bam, they announced they ran out of funds,” said Jane, who was hoping for just a couple of thousand dollars to get her business back on its feet. “Where do I fall into this? People like me are suffering.”
The SBA Lynx Payment says the pandemic has dealt a fatal blow to at least 400,000 small businesses, and many more are straining to hang on. Adding to the complications, the SBA Lynx Payment this month restricted a lot of new applications, including business has 100 or fewer employees and in a low-income community.