Name: Changes to Florida’s bridge loan program allowed some businesses to get multiple loans while 37,000 received nothing
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Changes to Florida’s bridge loan program allowed some businesses to get multiple loans while 37,000 received nothing

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AdvertisementBy Orlando SentinelApr 21, 2020 at 7:05 amEvan Dimov lets out a heavy, defeated sigh thinking about the optimism he had when he applied for a $50,000 loan for his Orlando restaurant, Too Much Sauce.“I thought, ‘Maybe I have a chance here,” he said. “I thought, ‘This was designed for small businesses.’”AdvertisementBut the loan never materialized. He never even heard from the Small Business Development Center Network that handled applications.Mike Myhre, CEO of the Florida SBDC Network for the last decade, said the “unprecedented demand” quickly drained the $50 million program, prompting the state to stop accepting applications less than a month after opening it. But critics have also pointed to changes made to the program before the coronavirus outbreak that allowed business owners to ask for more than the typical $50,000 maximum and apply for multiple loans.AdvertisementIn fact, just 170 businesses received about $20.5 million state figures show.About 100 of the loans that were given out were for more than $50,000, totaling about $10 million. That translates into an additional $4.8 million that could have gone to other businesses if a $50,000 cap had been enforced. About 70 other applicants received multiple loans, totaling $10.6 million.Meanwhile, more than 37,000 applications, including Dimov’s, were turned away. Only 944 loans, about 2% of applications, were approved. The short-term loans, usually made available to businesses impacted by hurricanes, are interest-free for the first year and supposed to be a stopgap until businesses can tap into federal programs or private loans."To put it in perspective, as a benchmark, we received about 2,500 applications for Hurricane Irma and that was a record number at the time,” Myhre said. “We didn’t expect 38,000. Nobody could have really fully understood what it was going to mean to the businesses in our state.”John Rivers, owner of 4 Rivers Smokehouse and The Coop, received four loans totaling $400,000. He operates 16 restaurants and in a normal year does about $50 million in business, he said. Although his restaurants are larger compared to some other mom-and-pop places, he stressed the importance of being able to apply for loans for his individual locations, which Myhre said is allowed as long as they "operate independently and file individual business tax returns.”“We’re still a family-owned business. It’s still Monica and [me]," Rivers said. “When you lose that much and you continue to lose that much and you burn through that much … it’s incredibly scary. We had to make significant changes to save the brand, save the company."Chris Esser, co-owner of Sanford Brewing Company, received two loans totaling $100,000 for his breweries in Maitland and Sanford. He’s had to lay off about 80% of his 46-person staff, he said, and has lost much of the spring break and St. Patrick’s Day business he usually depends on.“(The locations) have their own employees, their own expenses, their own accounts. They’re completely separate businesses," Esser said. “Without getting the bridge loan just to keep us going … we’d be closed. Right now we are barely keeping the lights on. We do now in a day what we used to do in an hour.”AdvertisementIt was bittersweet to learn that so many other businesses had not gotten loans, though, Rivers said.“When we first got the money, we were so jubilant and thankful,'' he said. "And when we saw the list, it became a realization of how many other organizations didn’t get it. It weighed on my heart greatly this weekend.”He’s proposed finding a way to recycle the money once other, larger loan programs start releasing money.Other bridge loan recipients included a chef and owner of a handful of high-end Jacksonville restaurants who received $350,000 from six separate loans; owner of the Orlando-based Sun Vista Hotels who received $300,000 from three loans; a handful of Vale Food Company restaurants in Fort Lauderdale, Gainseville and Jacksonville received $250,000; a Brevard County restaurant owner who received nine loans totaling $410,000; and a Cici’s Pizza franchisee received five loans totaling $250,000, including for two stores in Orlando.Also on the list was Angelo Crowell, a former NFL linebacker turned Jersey Mike’s franchisee, who received $500,000 through 10 loans for his sandwich shops, including one in Apopka and another in Seminole County. Crowell in a news release from the governor’s office was touted as one of the first small-business owners to get approved for the loan, but the release did not mention that Crowell had received multiple loans.Myhre said the decision was made to raise the typical maximum from $25,000 to $50,000 and allow businesses up to $100,000 in “special cases” after Hurricane Irma hit Florida and small businesses needed more to tide them over until federal relief became available. To get more than $50,000, businesses have to show tax returns and financial statements to show a “bonafide need."Advertisement“We heard from the business community around the state that that simply wasn’t enough capital," Myhre said.Some Central Florida lawmakers have questioned why stricter limits weren’t put in place so the program could benefit more businesses. Florida Rep. Anna Eskamani, D-Orlando, pointed to changes made to the Small Business Administration’s Economic Injury Disaster Loan advance that, due to huge demand, were limited to $1,000 instead of the usual $10,000.A letter to DeSantis spearheaded by Eskamani and signed by hundreds of Florida-based small-business owners, asks the governor to allocate an additional $450 million to the emergency bridge loan program and increase staff to process applications more quickly. Eskamani said the money could be rerouted from the $543 million the Republican-controlled Legislature and DeSantis have committed for corporate tax breaks“We have heard from frustrated small business owners from across the state who were not only left out of the program but received no notice that the program had even ended or updates on their application,” Eskamani said. “I have heard absolutely nothing from DEO of why some individuals received multiple loans and multiple special loans at $100,000.″State Sen. Linda Stewart, D-Orlando, said she believes the money was distributed unfairly.WeeklyA weekly update on health news in Florida. &gt; “I think that it could have been handled differently," Stewart said. "But I don’t think that there’s anything that they can do about that now, other than to try to find out, basically, what are you going to do for the 37,000 [business owners] that are not able to get their request? … How are we going to help these people?”AdvertisementMyhre argued that imposing stricter limits on the program "would have wound up causing more harm” and said the SBDC is now focused on helping business owners apply for other assistance.Dimov already has missed April’s rent for his restaurant in the Mills 50 district. He’s had to cut hours of his remaining 11 employees, which include his two college-age daughters. The bridge loan, he said, would have been “a buoy in the middle of the ocean," and without it, he’s not sure how long the restaurant will survive.“This was a family thing. My girls came up with the name. My wife came up with the menu. ... We’ve put our hearts into this,” he said. “Oh my God, you can see my daughters, their reaction to this. They see my stress, even though I try to hide. I see my wife cry in the kitchen here sometimes."Now, he waits to find out if his application for the federal Paycheck Protection Program will have better luck. He’s afraid it will also be dominated by larger businesses.“When you apply, you think, ‘Ok, this is going to happen,’ and you hear the politicians say how much money is available,'' he said. "And then they say, ‘Oh, there’s no more money. Right now, I’m not hoping for anything. I don’t know.”cglenn@orlandosentinel.com; SLemongello@orlandosentinel.com Advertisement

AdvertisementBy Orlando SentinelApr 21, 2020 at 7:05 amEvan Dimov lets out a heavy, defeated sigh thinking about the optimism he had when he applied for a $50,000 loan for his Orlando restaurant, Too Much Sauce.“I thought, ‘Maybe I have a chance here,” he said. “I thought, ‘This was designed for small businesses.’”AdvertisementBut the loan never materialized. He never even heard from the Small Business Development Center Network that handled applications.Mike Myhre, CEO of the Florida SBDC Network for the last decade, said the “unprecedented demand” quickly drained the $50 million program,...

Changes to Florida’s bridge loan program allowed some businesses to get multiple loans while 37,000 received nothing

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