PHOENIX (3 On Your Side) - When the COVID-19 pandemic started, business at Regal Cleaners in Phoenix plummeted, and it’s still down about 50% for the year, according to Dave Reddish, the owner of the family-operated dry cleaning shop.
"Never in my wildest nightmares would I have seen something like this impact us so severely," Reddish told 3 On Your Side.
Like many small business owners, Reddish says he struggled to secure a loan when the first round of the Paycheck Protection Program launched.
"The funding went so quickly from the SBA that we missed out on the first round," he said. "It was so heart-wrenching and very stressful."
Regal cleaners eventually received funding from the forgivable loan program, which kept 14 employees on the payroll. When a new round of PPP funding opened up a month ago, Reddish applied again.
"It's going to help keep our doors open, frankly," he said. "This time, the whole process went a lot more smoothly."
To ensure the smallest of the small businesses get access to PPP money, the Biden administration announced a series of changes. Beginning Wednesday, February 24, businesses and non-profits with fewer than 20 employees will get an exclusive two-week window to apply for funding. Then, in March, new rules will allow some businesses that had previously been excluded from the program to participate, including people who are self-employed, sole proprietors and independent contractors.
Hannah Smolinski, of the Clara CFA Group, said the new rules will provide critical support to sole proprietors.
"A lot of them have only been limited to whatever their net income was, so if they in 2019 or 2020 had a hard time or had a lot of expenses, their PPP loans were pretty tiny, or if they had a negative number or it was zero, they could not get PPP at all," Smolinski explained. "Now what they’re doing is they’re saying we’re going to use gross income."
"Don't leave money on the table," she added. "It’s worth looking into this to see if you qualify because they’re really trying to push this money to the smallest of businesses because those are the ones that have been the most confused about everything and don’t have people in their corner to help them through this process sometimes."
The new rules will also get rid of restrictions on people applying for loans who have prior non-fraud felony convictions or delinquent federal student loan payments.
On Monday, President Biden said he is proposing a $175 million dollar plan to help small businesses with the PPP application process, which would include community partnerships and a new hotline to help business owners.
"We will ensure every dollar is spent well," said President Joe Biden on Monday. "These changes will bring much-needed, long overdue to help to small businesses who really need help staying open, maintaining jobs, and making ends meet."
Reddish is banking on receiving complete loan forgiveness. He's hopeful it will be enough.
"This is a lifeline, honestly," he said.