Like many small business owners, New York City restaurateur Dan Kluger spent his Friday scrambling to apply for a loan under the U.S. government’s $349 billion small business bailout fund, which officially launched in the morning.
Kluger’s regular banker at First Republic Bank had told him on Thursday it could not process his application due to uncertainty over the program’s terms, as Trump administration officials were still tweaking the details as late as Thursday night. But the bank alerted him on Friday that he would be able to apply after all.
“It’s emotionally draining,” said Kluger, who was forced to lay off 122 staffers. “It’s a really constant sense of not knowing what’s next at an already stressful time.”
The desperate owners of tens of thousands of businesses - many shuttered for weeks due to the coronavirus outbreak - inundated lenders on Friday amid frustration that basic details, including the interest rate and application form, were still being finalized less than 12 hours before the program launched.
“It’s not like you just snap your fingers and, ‘Oh, let’s start offering this brand new loan product where we just found out the interest rate yesterday,’” said Scott Pearson, a lawyer at Manatt, Phelps & Phillips who advises banks on compliance.