When she applied for the Paycheck Protection Program (PPP) loan, Carole Boutry had a nasty surprise: the Bank of America online form mentioned that an American company whose owner is foreign would not have the right to the loan. Bam France, the musical instrument case company of which it manages the American subsidiary, has a German owner. The manager knows, however, that subsidiaries of foreign groups or owned by foreigners are entitled to this aid.
"At first they didn't want to hear anything, they told me that it was up to me to prove that we were entitled to the loan …" After a multitude of calls and very long waits, a bank adviser ends up telling Carole Boutry that she is indeed right. But Tuesday, 8 days after his first contact, the online form had still not been changed. "I have heard everything, including going to another bank, but BofA has been our only bank for 20 years and most banks only grant these loans to their existing customers." Result, Friday evening, she put the 5 employees of the company in furlough (Partial unemployment). “We will take everyone back if we can get the loan” she says.
The aid plan for SMEs voted by Congress at the start of April is not only gigantic (more than $ 350 billion for PPPs only intended to keep jobs), it was also eagerly awaited by the vast majority of American companies. To speed things up, Congress has chosen to go through the banks using a pre-existing loan system even though the majority will be turned into a grant. However, many banks have found it difficult to implement the program. Of the 20 French entrepreneurs or business leaders in the United States contacted by French Morning, only 2 had received funds by the time of publication of this article.
“Crucial to keep employees”
Franck Bondrille, head of the travel agency Contact USA, submitted his application as soon as the ticket offices opened, via a specialized platform (Lendio). He has been waiting for a response since then and has had to lay off 15 of his 20 employees in the meantime. “All of the activity stopped almost overnight; I had 42 groups in New York in April and May which is a very strong period for us ”, he explains. When the money arrives, he plans to re-hire all the dismissed staff. “It will allow us to prepare for the recovery, we hope in September. Fall is a busy season, especially with the New York Marathon, where we normally welcome 5,000 people. ”
Yet the SBA (Small Business Administration) gives impressive figures: Tuesday, April 14 in the middle of the day, more than 1.1 million loans had been approved, for a total of 257 billion dollars. But only a very small part has so far been actually received by the beneficiary companies. Ariane Daguin, the founder of Dartagnan, is one of them. The "queen of foie gras" (which also sells many other poultry and meats) submitted its application to the Chase on Sunday, April 5. “All day long we called our advisor, we prepared all the documents and as soon as the online form was ready, she warned us. It was done in less than two hours afterwards ”. And on Friday, the $ 3.5 million, representing two months of payroll, arrived on the company's account. It was time: "75% of our customers are restaurants, a turnover that disappeared overnight. We’ve been selling a lot online since then, but that’s very far to compensate. ” Thanks to the loan convertible into a grant, Dartagnan was able to keep its 270 employees. “It’s crucial to be able to restart quickly on recovery, underlines Ariane Daguin. Thanks to this grant, I can sleep more peacefully until the end of June. Hopefully by then the restaurants will have reopened … "
“Forcing”
Head of the Roche Bobois “northeast” subsidiary, Pierre Gérardo is also one of the few to have already received PPP loan funds. “This will allow us to hold out until the end of June and preserve everyone's salaries up to 75 to 80%, including salesperson commissions ”, he says. For many others, the process has been more complicated, including those who, like Carole Boutry, have a business whose owners are not American. “We have received many requests from people who have told us that their bank refused them the loan for this reason, notes Valérie Demont, partner in the law firm Sheppard Mullin. This is regulated bank by bank, and even adviser by adviser. Things got started so quickly that the rules are not clear to the banks. But one thing is certain: the law does not provide for the exclusion of companies with foreign capital (as long as they have an American legal structure and with employees on American soil). Counsel for the lawyer: “Do the forcing, in general it ends up happening”. Often, a simple reference to the official SBA documents (pages 5 and 6 of this document and this form) is often enough to convince advisers who are overwhelmed and short of information.
Funds soon exhausted
Boss of the Storefront startup, Mohamed Haouache also asked for a PPP loan in order to keep the fifteen employees he has in the United States. Its site is a platform that allows you to find a “popup store” and other places for events. Its activity has therefore stopped completely for a month. From Paris where he is in confinement, he set his alarm clock in the middle of the night a week ago to be able to complete the online request from his bank, Silicon Valley Bank. "It was a disaster, they were obviously not ready, the site bugged, I could not make my request". An e-mail from the bank tells him to start again the next day, then the next day. It was not until Tuesday, a week later, that he was able to complete the form, without knowing when his request would be processed. "The problem, he says, it’s because we don’t know if there’s any money left. According to the SBA, funds voted by Congress to finance this program could be exhausted before the end of the week. A law providing for an additional 250 billion is currently blocked in Congress, for lack of agreement between Democrats and Republicans.
“Emergency funds” that take their time
Besides PPP loans, SMEs can also apply for another type of aid, called EIDL (Economic Injury Distress Loans). They can go up to two million dollars, including a so-called emergency subsidy of 10,000 dollars which had to be paid within 3 days of the request. This grant will vest even if the loan is not granted. Only, almost 4 weeks after the installation of the device, it was more than chaotic. Paul Maurice, who accompanies French companies in the United States, says that he has made two cases for two American subsidiaries. “We were first told that the 3 days to receive the $ 10,000 emergency aid had become 7 days; and then that the $ 10,000 had in fact become $ 1,000 per employee ”. But more than ten days later, there was no news, let alone money.
Unlike PPP loans, these EIDL loans are processed and granted by the SBA directly, an administration with limited resources and visibly overwhelmed by the influx of requests. Jean-François Bonneté, importer of wines and spirits, based in Houston, made his request on March 21, the day after the day that Texas was recognized in a state of disaster, which gives entitlement to the device. “I called them this Tuesday, (more than 3 weeks later) and they told me that my case has still not been processed. " For the moment, Jean-François Bonneté has managed to keep his dozen employees, by reducing their hours. He plans “Almost zero activity until the end of June then a correct activity (but far from past years) from September to December. In these conditions, he hopes, we should be able to hold on ”. But one thing is certain: in his forecasts, he did not take into account any of the aid he hopes to obtain. "There are too many uncertainties at the moment."
