Jenn Topliff produced 250,000 coconut macaroons in 2019, selling most of them to Alaska Airlines as treats for its first-class passengers. Zupan also carries the threats, and Hawaiian Airlines was in talks about a substantial order from Roons, Topliff’s small company in Portland.
Then came COVID-19: Air travel hit a wall and Topliff’s business almost evaporated, overnight.
Like so many other entrepreneurs hit by the pandemic, federal grants and loans have kept Topliff afloat. While waiting for the resumption of air travel – and full catering on board – she began to refocus on marketing her buttons for corporate holiday gifts.
The appetite seemed to be there, so five months ago Topliff arranged a federal disaster loan of $ 114,000 to help cover packaging and ingredients, and to start repaying its landlord the rent payments. that she missed. She was expecting a strong cooking season this fall.
But the federal money never arrived.
While the Small Business Administration’s online portal says Topliff has been “confirmed” for its $ 114,000, a letter from the federal agency indicated that it had withdrawn its application and would not receive the money.
Dozens of other Oregon entrepreneurs are facing the same crisis, lamenting in online forums that the Small Business Administration has reneged on loan promises. They say they cannot get any clarification from the federal agency.
Small business advocates say the problem appears to be widespread. Topliff said she couldn’t pay her suppliers or her landlord, and couldn’t afford to start her vacation baking without the loan she thought she already had.
“It’s just this stupid waiting game that’s going to kill us, this problem that got us out of the loop,” Topliff said.
Small businesses across the country are reporting similar problems with the program officially known as the COVID-19 Economic Disaster Loan (EIDL). It is one of several programs that Congress has authorized to help entrepreneurs weather the pandemic.
EIDL loans offer a 30-year term at low interest rates, money that many cash-strapped entrepreneurs cannot get from traditional banks. Businesses say the money was readily available when the loans were first available last year – and that may be part of the problem.
Fraud plagued many federal benefit programs in the early months of the pandemic. Thus, requests for expanded aid programs appear to be under closer scrutiny in 2021. But tighter scrutiny appears to have gone haywire in many cases.
“For some reason there seems to be a widespread denial of many requests, with excuses such as the address was not correct or it was marked ‘not interested’ by the business owner,” he said. said Mitch Daugherty, co-founder and director of Built. Oregon, a nonprofit organization that assists the state’s consumer products industry.
Blocked loans put entrepreneurs in a sort of purgatory, Daugherty said, trying to save their businesses while waiting for loans that might never come. He said the SBA appears to have stumbled in verifying loan eligibility, creating a crisis for many small businesses who should be eligible.
“Honestly, I don’t know what to tell them,” Daugherty said. “It’s the government.
U.S. Representative Earl Blumenauer D-Portland said Congress should allocate more funds to the SBA to help overcome staff shortages and other issues that have kept Topliff and other small business owners from receiving the money they were promised.
“Unfortunately, mistakes were made which resulted in a slow and frustrating process for some companies,” Blumenauer said in a written statement. “I will continue to lobby for these resources as I work to help voters who have asked for help.”
Sean Wilson, an SBA spokesperson in his Portland office, acknowledged the problems with loan verification but said he couldn’t speak to the extent of the problem. He said his agency had approved nearly 40,000 EIDL loans in Oregon, worth $ 2.8 million, and was working to overcome the problems and increase that number.
In an email, Wilson said one of the most common issues was an “address mismatch” between loan applications and the addresses on the tax forms the agency uses to verify eligibility. entrepreneurs. This sometimes happens when a business moves, Wilson said, or when it uses a PO box on one part of an app and a physical address on another.
Other times, he said the loans were triggered by confusion over tax form numbers or employee ID numbers.
If the status of the business owners’ claim incorrectly says “withdrawn,” Wilson said they should start by writing the SBA to [email protected] If that doesn’t work, Wilson said contractors in Oregon should try the agency’s Portland office at [email protected] or 503-326-2682.
“We’ve had great success working directly with individual business owners to navigate the process,” Wilson wrote. “While we cannot directly make changes to the system, we are able to identify potential log jams and elevate those issues to resolve them. “
Topliff and other entrepreneurs say they tried to work with the agency to no avail.
“It was like everyone was a ghost,” she said.
Downtown Portland hairstylist and salon owner Julie Brown said federal aid last year helped her deal with a pandemic shutdown and downturn in business that lasted through 2021. For some reason, she said, people just don’t seem to have their hair done that often.
But when she asked for more help this year, Brown was turned down. The SBA told her that she was not eligible because she was not a U.S. citizen.
It’s ridiculous, says Brown. She said she was born in Washington State and had lived in the Northwest all her life.
While Brown has said her finances are fine, thanks to her initial loan last year, this year’s episode made her skeptical of the whole system. She wonders where the federal money really went, if not to those who qualified for the loans.
“It seemed really helpful and people were going to get support during this crazy time we live in,” Brown said. “And then being refused for the reasons I did sounded a lot like a scam.”