BERKLEY, Mich. – One of the biggest fears with coronavirus (COVID-19) is the damage it’s having on the economy.
Businesses are trying to take advantage of several government programs like the Small Business Administration Disaster Loan Assistance. But some workers are falling through the cracks.
Some businesses are desperate, especially employees, because they are unable to work. As the applications get processed, some people are finding out the money isn’t flowing like they thought it would.
Ed Steele owns RT Software Systems of Berkley. The business basically provides an IT department for companies that don’t have on in house. He was also in the middle of a massive data expansion.
“We’re actually working on the 6th Precinct police department from Detroit. We bought that from Detroit city and we’re in the middle of change that into another cloud computing data center,” Steele said.
That all stopped when Gov. Gretchen Whitmer issued the stay-at-home order. Steele tried to take advantage of the fed’s loan lifelines to small businesses.
In 23 years of business, Steele never had a bankruptcy but also never took out a loan. He said his credit score had fallen 193 points to 518 in the last month because of one late payment.
The people who work for him are technically independent contractors, not employees, and they’re falling through the cracks.
“To be eligible for forgiveness you have to produce payroll tax filings reported to the IRS,” said Pat O’Keefe, with O’Keefe Consulting. “State income or payroll tax.”
Which means you have to demonstrate you have W-2 employees. Some businesses just have independent contractors.
“In my mind aid should be aid. I shouldn’t have to jump through hoops to get aid,” Steele said.
It’s unclear why Steele’s personal credit score would have been the reason given for the denial. O’Keefe said it’s a loan and with tens of thousands of businesses applying everything may be on the table.