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Helping small businesses survive
Small businesses are struggling to stay afloat after bailout money meant to save them went to larger companies.
LOS ANGELES - The federal government’s bailout package for small businesses ran out of funds fast and data shows that the money didn’t even get to the business owners who need it the most.
It turns out many publicly traded companies applied for the paycheck protection program, not just mom and pop shops and competition is fierce to get any funding.
Congress just came together on another round of more than $300 billion for small business loans but in our look at bringing back business, many small business owners fear if banks dole out this next round of federal stimulus money they way they did the first round, not much will go to the “little guy."
“The frustration level is just tremendous,” said Stu Goodman.
Goodman has been lighting up major Hollywood films for more than 30 years, running a family run business out of his own home. But now, the lights are out on any income.
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“The crickets that we heard from the bank from the time I applied, ‘til even today, is astounding,” Goodman said.
He turned to what he thought would be a federal spark plug for small businesses – the paycheck protection plan – a forgivable loan to keep his workers afloat. However, despite being one of the first to apply for the first-come-first-served aid, he says his lender hand-picked who would get the financial aid.
“Simply because you can do something, doesn’t mean you should,” said Goodman.
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A new analysis shows most of the $349 billion set aside for small businesses went to publically traded companies. One company worth more than $400 million, was awarded nearly $7 million, most small businesses, like Goodman’s, only need a fraction of that amount.
“We tried to play by the rules we were given but with how things played out and what was done, we are left with nothing,” said Goodman.
“We thought that that money was going to be geared more towards small businesses, the small businesses that make up the backbone of our economy,” said Los Angeles City Councilman John Lee, of District 12.
Lee is taking on matters at a district level, considering federal funds aren’t getting to the mom and pop shops.
“So we have to make sure that we’re paying attention to the people who need it the most,” he said.
The Small Business Angel Fund was created to provide interest-free loans to small businesses within District 12 that are considered “essential” during the COVID-19 pandemic.
“Hopefully we can meet everybody’s needs,” Lee added.
Do you have a small business problem that we should be reporting on? Email Sandra.Endo@FOXTV.COM to tell us more.
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