One Small Business Owner Gets Loan After a Confusing Struggle; Program’s Expansion May Help

Needed a loan to survive.

By Lisa Kava

Many local business owners are struggling financially after being forced to close in March due to Covid-19. With the loss of income, some applied for loans to pay their ongoing rent and bills, but were turned down — or turned off by the difficulty of the process.

Now, it could get easier. Whereas the first round of government relief funds for small business loans was quickly depleted — in some cases by businesses it wasn’t meant to help, like the L.A. Lakers (who later returned the money) — the second round has more than $126 billion left to lend to small businesses as of the beginning of May. Sixty billion dollars of that is earmarked for community and regional banks.

In addition, New York State just launched its own small business lending program, called “NY Forward Loan Fund” (NYFLF). The loans will focus on small businesses, nonprofits and small landlords who did not receive federal relief. Instead of having up to 500 employees, as with the federal loans, these will require businesses to have 20 employees or less. Applications will be accepted starting at noon, May 26th. For qualifications and an application, click here.

It didn’t come easily, but Chris Fernandez, the owner of X93 Fitness, a small private training facility on Amsterdam and West 93rd Street, recently got what is commonly called a PPP (Paycheck Protection Program) loan, which is part of the $2 trillion federal stimulus package known as the CARES Act. Since the shutdown, Chris has been conducting virtual training sessions; on a computer screen he guides clients through a weight-training routine using their own body weight, ending with a 15-minute cardio workout. But only approximately 50% of his clients are participating.

Chris (center) is a volunteer fireman. Pictured with his family.

“It is just enough to pay my home mortgage and put food on the table,” said Chris, who is the father of two children, ages 9 and 7, and whose wife is a nursing school student. They live in Wayne, New Jersey. “But I cannot afford to pay my landlord the full rent on my studio. I don’t want to lose my home and I need to feed my family.” He offered to work out a payment plan with his landlord, but has not heard back from him yet.

Chris applied for the PPP loan, which is forgivable at the end of eight weeks if you fulfill certain criteria, through his bank, JP Morgan Chase. Chase denied his initial application, saying he had not submitted enough proof of payment for his two contract employees. Chris applied a second time, submitting 1099 forms for each employee. He was denied again, for reasons he still doesn’t understand. It was at that point that he wrote to WSR:

“Every time they say they are helping small business, I immediately file, but never any luck. Chase denied me because I didn’t do my 2019 taxes, which are due July 15th. So now I submitted all to my accountant to do. What help are we getting? Only help I see is the Upper West Side residents trying to keep local business afloat with some business I am forever grateful for.”

West Side Rag reached out to Chase for an explanation of the denials. A spokesperson said that Chris had indeed filed the wrong forms. “Per guidelines from the federal government, in order to be approved for a loan under this program each employee must file a W2,” said the spokesperson. “Because the employees did not file W2 forms, he was denied.”

The next day, a banker telephoned Chris encouraging him to reapply, but as a sole proprietor. The banker suggested the contract employees apply individually as well. So, Chris applied a third time and his PPP loan was finally approved.

“JP Morgan Chase has helped 239,000 businesses get Paycheck Protection Program loans, including more than 51,000 in New York State, and we’re not done yet. We’ll keep processing and submitting applications to help as many small businesses as possible,” the spokesperson emailed WSR.

“It is nowhere near what I need, but it is something,” Chris told the Rag. “I thank you.”

Chris also applied for a private loan from LendingClub, which he had successfully borrowed from in the past to purchase gym equipment. “I received a $100,000 loan and paid it back on time,” he said. Now, he was quickly denied. “The broker told me gyms have a greater chance of failing due to Covid-19.”

A LendingClub spokesperson told WSR, “LendingClub is a marketplace that brings investors and borrowers together. Unfortunately, due to Covid-19 we’re unable to match all borrowers with investors. When the market returns to normal loan funding may become more readily available.”

Chris still faces an uphill financial battle. “What kills me is what is going on in Manhattan,” he said. ”I do not know what will happen to small businesses. I am just one of so many going through this right now. If it weren’t for some UWS clients training from home, my business would be shut down for good.”

“Working out with Chris allows me to feel connected to what life was like before everything shut down,” said one customer, Patrizia Di Maria. “I would do anything to keep that place going.”

“I have been a client of X93 Fitness since they opened,” said Abby Rubin. “They aren’t just wonderful trainers, they are friends — family. It’s important that we look out for each other and help however we can. The neighborhood needs these small businesses, which are really struggling during this time.”

NEWS | 6 comments | permalink
    1. Sunny John says:

      It did not help the real small business owners. It helped large franchises. Make a survey and see how many small business are closed in last 3 months and how many will be Closed soon.if it was given to small business they would not have closed. It’s all a drama and game.

    2. Steve Ferro says:

      I wish you well through this hard time Chris and all true small businesses, I feel most small business owners have been forgotten buy state and federal government, it makes us feel like we don’t matter. I applied for all forms of financial aid and so far, 10 weeks later received nothing but useless email replies. I have depleted my savings to keep my business afloat all the while watching large companies who have other means of gaining funding hog the money meant for those of us that truly need it… Disgusting is the word that comes to mind. I have been in business for 25 years and to see it crumble from lack of support after all the years I supported is saddening. I wish you well and luck and a prosperous future Chris and all small business.
      Steve Ferro
      Owner of a small auto repair shop in NJ

    3. Aron Barkley Jr. says:

      Good evening i own a barber shop in the state of Ga.cant get any assistance i have over head just like others business they giving loans but i was told I didnt qualified

    4. IRJ says:

      It’s also incorrect that SBA use line 31 of Schedule C, the net income after all expenses to determine the final loan amount for sole proprietor. That’s not a living payroll equivalent amount if the loan is $5.

    5. Alain Denis says:

      I understand what Chris is going through, I have a transportation where we transport children to and from school as well as doctor appointments. The guidelines for the PPP is incorrect due to the fact were unsure as to when schools and other facilities will be reopened in addition what preventive measures must be taken to assure the safety of ourselves and clients. We can not generate any revenue for now nevertheless, will be required to repay starting after 8 weeks not having detailed guidelines what so ever, it doesn’t make sense.

    6. Road Express says:

      It’s not true. I have a PPP loan and i have only 2 employees. 2nd round help small business. But the owner shouldn’t apply with banks they should apply with lenders like BlueVine. I have my loan in one 1 week in my bank acct. Owners don’t know that lenders not banks they have 6 billions for really small businesses.