Although generally nothing is free, seldom does a country print money and place it in the hands of its constituents without asking many questions.
That was basically what happened in the United States during the past 13 days with the emergency loans that the federal government granted – through the Small Business Administration (SBA) – in the financial aid package for the COVID-19.
But this time, from a fund that exceeded $ 349,000 million, it could be said that Puerto Rico did not even look at the distribution.
This is because until last April 13, according to SBA data, in Puerto Rico —an economy with more population than almost 20 states and over 30,000 SMEs— barely 1,001 loans were processed, for a total of about $ 319 million, but the Figures offered yesterday by Popular and FirstBank would increase that amount to about $ 603 million.
Yesterday, SBA stopped requests from the Payment Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) for running out of funds.
As a result, until there is an agreement with Congress, none of those grants will be available to entrepreneurs.
Between the most recent SBA report and yesterday, the amount of loans granted on the island could increase, because last night, Banco Popular reported that the institution processed about $ 494 million. Some $ 398 million in PPP was approved in Puerto Rico and another $ 96 million through Popular Bank, the subsidiary in the United States.
“The program has undoubtedly been very beneficial for small and medium-sized businesses at these challenging times,” said Popular chief executive officer Ignacio Álvarez in written statements.
Meanwhile, FirstBank reported that even though the process established by the Federal Government for the granting of these loans had multiple challenges —including constant changes in the SBA guidelines and situations with the technology provided for the processing of cases—, the bank managed to Support 921 clients with the approval of $ 209 million, representing 80% of the money requested by their clients.
“A key investment in this performance was a substantial investment in a digital platform (FINTECH) with direct integration to the SBA portal, which increased agility in the processing of cases,” said in written statements Aurelio Alemán, president and chief executive officer of FirstBank. .
But even if Puerto Rico reached $ 500 million in these loans, the figure would be very low in relation to other states with populations similar to the island.
“Puerto Rico was completely left behind,” said Aida Escribano, a partner at the BDO accounting firm, referring to the PPP.
“Here we are used to federal funds being allocated for a region in a disaster or program, but in this case, it was a program available throughout the United States. It was clear that we could not sleep because the funds were going to run out, ”said Luis Torres Llompart, also a partner of BDO and who stated that, clearly, business organizations did not put their batteries to guide their members on both programs.
Under the PPP, the employer can receive up to $ 10 million to pay up to eight weeks’ payroll and expenses such as rent or basic utilities. Under the EIDL, companies received a $ 10,000 cash advance that did not have to be returned to the SBA.
“I am very concerned about the effect that businessmen may have if Puerto Rico does not receive all the aid available on time,” said Francisco Uriarte, managing partner of ESP Advisers and chief financial officer (CFO) of Burea. .
The also vice president of the directors of Grupo Guayacán, reported that the companies he advised settled the EIDL loan on March 30, but beyond a confirmation number, they have received no response. The same, he said, has happened with the Economic Reinforcement incentive from the Department of Economic Development and Commerce (DDEC) and with PPP loans.
Other businessmen interviewed by El Nuevo Día reported that they received approval for their loans, but were told that they would not receive the money until they opened a business account at the banking institution. At least two businessmen indicated that they had to fill out the aid application on two separate occasions. A fourth businessman reported that the institution asked him for multiple documents about the company’s operations and evidence of its assets, even though the loans are guaranteed by the SBA.
In Puerto Rico, only Banco Popular, FirstBank and Oriental have processed loans. This is because the nine SBA-authorized credit unions never received access passwords in time to help their members and clients.
Now, it only remains to wait for Congress to allocate additional funds to the PPP and the EIDL. In this, President Donald Trump and Republican and Democratic federal legislative leaders agree, but there is still no agreement.
Marian Díaz collaborated with this story.