The government has run out of small business stimulus loans. Here’s how Florida fared.

Linda Kaplan is still waiting.

It took the longtime Miami-area immigration lawyer two weeks to submit an application for a loan through the Paycheck Protection Program through her bank, Wells Fargo. The loan was for less than $10,000.

Finally, Wednesday night, she was able to complete all her documentation and hit submit. But on Thursday, she learned that the $350 billion Congress had initially allocated for PPP loans had been exhausted.

Kaplan said she was frustrated, though not surprised.

”People need [that money] to keep businesses going and keep employees paid,” she said.

Kaplan is luckier than most: Her practice is still receiving work. But like tens of thousands of other small businesses in Greater Miami, Kaplan, and her one employee, have seen revenues crimped as coronavirus morphs from a health crisis into an economic one.

In advance of Thursday’s announcement about PPP funds being exhausted, Florida Senator Marco Rubio, the architect of the program, accused Democrats of playing politics in not approving additional funds.

“Why do we have to hold the most successful part of the CARES Act hostage,” he said in a video posted to his Twitter account.

On his Twitter account, Senate Minority Leader Chuck Schumer countered that while Democrats agreed more money was needed, he said the program required additional oversight.

“Dems actually want to get it into the hands of all who need it...That’s not what’s happening when websites are crashing, mom & pop shops and minority businesses are shut out, bigger banks are loaning to fav [sic] customers,” he said.

Florida has fared relatively better than most states, hauling in 52,021 loans worth about $12.7 billion of the initial earmark, according to figures released this week by the SBA. That is third-most in both categories. A state-level industry breakdown is not yet available.

Among banks that lent out locally was First National Bank of South Miami, which said it had kept nearly 6,000 employees on payrolls thanks to $63.2 million in funded PPP loans. Flores said her team has worked 18-hour days for 27 days, and through weekends.

“With the funding depleted we are distraught and very depressed,” she said in an email. “There are so many more businesses that need assistance. It is a real shame that politics is getting in the way of providing additional funding immediately for this program for small businesses...These are very tough conversations with the many business clients that we could not assist.”

Still, many local businesses find themselves in limbo. Cristian Alvarez had been waiting more than a week to hear from his bank about whether he and his brother had been approved for an SBA loan for their Little Haiti Argentine restaurant, Fiorito.

Thursday morning, he read that all the funds had been depleted. He still has not heard from his bank. ”We’ve lost hope of getting any help,” he said. “If it arrives, it arrives.”

His restaurant of 25 employees is now down to five, including him and his brother. He has been hiring his former employees for an occasional shift of 6-8 hours, “just to put some money in their pockets. He’s behind $10,000 on his rent and is working with his landlord to delay or reduce that.

“The idea now is just to survive,” he said.

Early evidence suggests that, nationally, the funds have disproportionately helped manufacturers and construction firms at the expense of the hospitality businesses — including restaurants, bars and hotels — that have suffered the highest rates of job loss in a month that’s seen approximately 22 million Americans file for unemployment. The loans are allocated on a first-come, first-served basis, an approach that has favored businesses that have existing relationships with lenders and the resources to navigate the government application process.

Data released on Tuesday by the Small Business Administration, which is administering the loan program, shows that construction companies have garnered nearly $34 billion, which is about 14% of the $250 billion that had been allocated through Monday. Manufacturers secured more than 12% of the loans, about $30 billion.

“Accommodation and food services” borrowers ranked fifth, with just under $23 billion in loans, or less than 10% of the total.

Restaurants say PPP loans haven’t been effective for them, because they can’t operate at full capacity until the danger of the pandemic has passed. All restaurants in Miami-Dade were ordered closed a month ago. Since then, some have tried to stay afloat, offering delivery and takeout. But that has only made up about 10-15% of their previous business.

“Payroll Protection is not doing what it was intended to do,” said chef/owner Tom Colicchio, the Bravo “Top Chef” whose grassroots Independent Restaurant Coalition intends to speak for America’s 500,000 independent restaurants and 11 million restaurant industry workers.

They asked, in a letter to Congress April 6, to include provisions in any new round of payroll protection grants to make the start date when restaurants are legally allowed to reopen in full. They argue the program shouldn’t require them to rehire their full staffs by June 30 since no one is sure if restaurants will be fully reopened by then, Colicchio said.

“If we can’t turn that loan into a grant, all we’re doing is saddling that restaurant with debt they’ll never be able to repay,” Colicchio said.

Bankers and borrowers alike want changes made to the program.

Restaurants and hotels have pushed for changes in how the money is allocated and in the rules for how it must be spent, including the mandatory amounts for maintaining payrolls, saying they need the flexibility to cover other costs like rent for as long as the crisis keeps them closed or their revenues low.

Bankers have pushed to temporarily relax anti-money-laundering rules that force them to closely scrutinize borrowers, and they say the SBA’s computer system needs to be upgraded. Some of the banks trying to participate in the program still cannot link up properly with the agency to submit applications.

The country’s smallest banks want the next round of stimulus to have a portion earmarked specifically for them — $50 billion out of $250 billion in additional stimulus money.

“Because the largest banks do not serve America’s smaller, rural communities, it would be a costly policy mistake to allow these lenders to soak up a disproportionate share of the funding,” Rebecca Romero Rainey, chief executive of the Independent Community Bankers of America, a trade group representing the smallest banks, wrote in a letter to congressional leaders Monday.

Whatever changes Congress makes, though, banks want lawmakers to get the next stimulus package done quickly. “Time is of the essence,” Rob Nichols, the president of the American Bankers Association, a bank trade group that represents both large and small banks, said in a call with journalists Tuesday.

As for Kaplan, she says she knows Congress will get around to passing more funds. Wells Fargo announced Thursday that it would still accept applications in anticipation of more funds being approved.

But the uncertainty weighs heavily.

“I don’t know what has actually happened to my application,” she said.

The New York Times contributed to this report.

This story was originally published April 16, 2020 at 5:33 PM with the headline "The government has run out of small business stimulus loans. Here’s how Florida fared.."