Smaller businesses faced difficulties in receiving PPP loans

Published 12:00 am Thursday, July 16, 2020

By Natalie Anderson

SALISBURY — While Paycheck Protection Program funds were able to help nearly 1,500 businesses in Rowan County and Kannapolis retain their employees, the process was more difficult for smaller businesses compared to larger ones.

Last week, the U.S. Small Business Administration, along with the U.S. Treasury Department, released detailed information regarding all 4.9 million loans obtained from the program.The program was funded from the CARES Act relief package and included $350 billion in loans for businesses with 500 employees or less in the first wave of funding as well as another $310 billion in the second wave.

Greg Alcorn, CEO of Salisbury-based Global Contact Services, said “we took our time applying” due to numerous changes, variables and amendments being made throughout the process. Additionally, he said, the company wanted to ensure the initial rush was over before applying. The company retained 500 employees, with 10 in Salisbury and the remaining 490 at its Long Island City call center in New York.

GCS was able to sustain its workforce in the meantime, and NYC associates became work-from-home agents when New York City was “ground zero” for COVID-19 cases, Alcorn said. The agents were able to assist other entities with a COVID-19 hotline and unemployment claims.

GCS on June 11 received between $5 million and $10 million during the second wave of PPP funding, and Alcorn said 100% of the funds went to payroll expenses.

Some rules and guidelines of the program have been modified along the way, but at least 60% is required to be spent on payroll expenses. Any remaining funds can be used for utilities, mortgages or rent.

Alcorn said the entire process was a “massive undertaking,” as all entities involved were “wiring the house with the electricity on.”

Less than two weeks after the first wave of funds was made available to lenders on April 3, they were completely exhausted. North Carolina Bankers Association President Peter Gwaltney said in April that banks struggled to administer the funds as they didn’t receive federal guidance until the night before the money was made available.

But while the process was a challenge primarily for banks and lenders, some small businesses had a less-than-seamless experience.

Elia Gegorek, chair of the Minority Business Council for the Rowan Chamber of Commerce, said fewer resources to help small business owners contributed to a more difficult experience applying for and receiving funds, particularly as many of them relied on their accountants to help with the process. Additionally, some minority-owned businesses, she said, are just a one-person business.

The SBA reported that 27% of funds went to small businesses in low- and moderate-income areas. And the second wave of funding included $310 billion in loans, with $60 billion reserved for minority-owned businesses. The second wave was intended to be more secure after lenders worked out the kinks, and measures were implemented to ensure small businesses were the ones receiving the federal relief.

Of the businesses that received less than $150,000 in Rowan County and Kannapolis, 27 loans were identified as being owned by women, and 129 said they were owned by men. A total of 10 loans went to business owners who were Asian. Four were Black. Four were Hispanic. Additionally, 12 of those loans were for veteran-owned businesses.

But the SBA stated that nearly 75% of all loans nationwide were for more than $150,000. For businesses that received less than that, their name and address was not disclosed in the data.

Pam Coffield, owner of Stitchin’ Post Gifts, said she experienced lots of difficulties with the loan process, particularly due to confusion about how exactly the program worked. For some time, her bank believed she needed to work with her accountant, and the accountant believed she was supposed to work with the bank.

“Honestly, nobody knew anything about how this works,” she said.

Coffield was unable to fully sustain her workforce of eight employees until she received her loan. The store closed on March 30, and Coffield began the loan process. Then, she received the funds at the end of April. But some employees received unemployment benefits in the meantime while others took a leave of absence, which she said was “the time employees needed the money from this loan to meet their paychecks.”

She said the form for the loan seemed “thrown together” by the government. She had to fill out another one after her initial application due to changes made to the form.

Nonetheless, Coffield said it’s a process that should be exhaustive and comprehensive if businesses are able to receive forgiveness.

Cyndie Mynatt, president of Ben Mynatt Buick, experienced a “seamless” loan process beyond the technology glitches every one had to manage. Within days of submitting the application in April, she received the money and was able to retain 55 full-time employees at the Salisbury location.

Mynatt said she used Uwharrie Bank, a community bank that was already an approved SBA lender. She is a member of the board of directors, but said she doesn’t believe her role with the board influenced her experience.

She and her son, Ward Childress, who helped with the process, said they were educated by the National Automobiles Dealership Association as well an automobile dealership accounting, which “fed a lot of timely information” throughout the process.

Around 75% of the funds were spent for payroll, and the rest was spent on rent, she said.

The money, she said, was a “God-send” as dealerships are commission-based. So, when the business plummeted, the company tried its best to keep employees at their average pay, though some of the work looked different.

Some employees took on maintenance projects, while plenty of training kept employees busy because, regardless of being considered an essential business, “no one was coming in to buy a car,” Childress said.

The Paycheck Protection Plan resumed accepting applications on July 6 in response to President Donald Trump signing extension legislation. The new deadline to apply for a loan is Aug. 8.

Mynatt and Childress said they encourage small business owners to continue applying for the remaining pool of funds. They encourage using an accountant who is “savvy on this topic.”

Contact reporter Natalie Anderson at 704-797-4246.

About Natalie Anderson

Natalie Anderson covers the city of Salisbury, politics and more for the Salisbury Post. She joined the staff in January 2020 after graduating from Louisiana State University, where she was editor of The Reveille newspaper. Email her at or call her at 704-797-4246.

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