- Johanna Mann is trying to apply for a small-business loan to keep her bakery afloat during the coronavirus pandemic.
- Her community bank told her it's not participating in the program.
- She's not having any luck elsewhere.
On April 3, Johanna Mann sent in her application for a small-business loan to keep her pie shop in Amherst, Ohio, afloat during the coronavirus pandemic. Feeling hopeful, she shared the good news with her workers.
"I said, 'It's going to be OK," Mann, 60, said. "I'm going to get this Paycheck Protection Program."
That hasn't happened.
Nearly two weeks later, Mann is still unable to tap into the $349 billion pot of money Congress earmarked for forgivable loans to small businesses hurting amid the public health crisis. The problem: Her bank, Buckeye Community Bank, told her it isn't participating in the government's program. And finding a bank that will lend to someone who's not already a client has proven difficult.
Making matters worse, the first-come, first-served program may run out of money as soon as Wednesday, reports said.
In the meantime, Mann has had to lay off five of her 20 employees. "I feel like a schmuck because I told them it's going to be fine," Mann said, her voice cracking during a phone interview on Tuesday evening.
"It's far from fine. I have to tell them, 'I can't even get anyone to take my application. I'm not getting the help I thought I could get it.'"
Holly Wade, director of research and policy analysis at the National Federation of Independent Business, said she's heard from other small-business owners who can't find a participating bank to lend them the money.
"It's a huge problem," Wade said. "You're essentially locked out of the entire loan program."
At Mama Jo Homestyle Pies, a few workers continue to bake apple, chocolate and strawberry cream cheese pies. "People say, 'I'm glad you're open. I have nothing else to do but watch TV and eat pie,'" Mann said.
Still, the business's overall revenue is down by more than 50%, Mann said. The 14,000-square-foot bakery usually sends out many of its pies to restaurants across the state, many of which are now closed.
"It's all going down the tubes," she said.
Mann took over the bakery nearly 30 years ago and quickly fell in love with the business. "It gives me a weird joy working with my hands."
With such a drastic hit to her business, Mann now fears she won't be able to meet her monthly payroll costs, which exceed $50,000. She's already had to lay off a quarter of her staff, all of whom are over 65.
"I worry more for my employees than myself," she said. "They have families and house payments and car payments.
"A lot of them live paycheck-to-paycheck," Mann added.
The Paycheck Protection Program was supposed to help business owners with that exact concern. Starting on April 3, banks began accepting applications for the forgivable loans that are supposed to cover up to eight weeks of a businesses' payroll expenses. Mann, for her part, hopes to secure a loan for around $133,000.
Soon after, she received an email from someone at Buckeye, explaining that it isn't giving out loans under the Paycheck Protection Program. Someone at Buckeye said she should apply for the loan through Fountainhead Commercial Capital, a bank in Lake Mary, Florida.
"They told me they're not equipped to handle all of the paperwork," Mann said. "I called them and said, 'What the hell?'"
Buckeye Community Bank did not immediately respond to a request for comment.
Mann hasn't had any luck with Fountainhead.
On Fountainhead's homepage, the bank says the demand for the loans is "unlike anything we have ever seen," and warns that, "we may eventually be forced to pause our acceptance of new submissions."
Mann said she filled out some information on Fountainhead's website and had someone at Buckeye contact the Florida bank, too, but she hasn't been able to submit her SBA application.
"I have a feeling it's because I'm not a customer of theirs," she said.
Chris Hurn, founder and CEO of Fountainhead, said he couldn't find any information under "Johanna Mann" or "Mama Jo Pies." He said they're willing to give the loans to new clients but acknowledged they were prioritizing current ones.
More from Personal Finance:
How Americans plan to spend their coronavirus relief checks
Unemployed and eligible for Social Security? What you need to know
What to do if the coronavirus pandemic is rocking your finances
"We're diligently trying to get through as many of these as we can, but we also know the demand is so tremendous and intense at this very moment, that we're sure to disappoint some," Hurn said. "Many people are in the same position as she is, hundreds of thousands, likely much more."
Mann hoped she could send her application to another large bank in Ohio, Huntington, but heard from her sister-in-law that it's only accepting loan applications from current clients.
Emily Smith, a spokeswoman for Huntington, didn't say whether or not the bank would give out the loans to new clients.
Federal regulations require banks to go through a rigorous vetting process when taking on a new business as a client, said Nick Simpson, vice president of public affairs at the Consumer Banker's Association.
"It's just a more onerous hurdle, which is why banks have elected to stay with current customers right now," Simpson said.
For now, Mann watches the news and grows angrier and angrier. And she worries the pot of money will run out.
"I hear Mike Pence, 'Everything is fine!'" she said. "I don't believe all these talking heads. They don't realize what's going on. I'm here! Will anyone take my loan papers?"
If no bank will, she said: "I can probably hang on another month."