Independent contractors and self-employed individuals can apply for loans as of Friday under the Small Business Administration's Paycheck Protection Program (PPP).
It's all part of the $2 trillion CARES ACT, passed by Congress to help the country rebound from the coronavirus pandemic.
The loans are proving to be so popular the SBA has been buried in applications, delaying the entire process. On Capitol Hill, the ranking member of the Senate Finance Committee, Democrat Ron Wyden of Oregon, described it as "a bureaucratic train wreck."
Billings banker Mike Seppala says in this case, the SBA is writing the rules as they go.
"In 2008, they came out with a disaster program. It took them about seven months to come up with the rules on that, and they wrote these rules in a week," said Seppala, the president of Western Security Bank. "That's why it keeps changing, but they've actually done a pretty good job of getting the information out. It's put a lot of pressure on the banks, but the banks, especially the community banks, have risen to the challenge."
The PPP loans can be used to cover payroll costs, rent, and utilities over an eight-week period. For independent contractors, that means wages, commissions, income, or earnings from self-employment.
The loans are processed on a first-come, first-served basis, so Seppala advises any contractor or self-employed individual to visit their local lender and get started with the application process.
"It's been quite the onslaught," Seppala said. "I don't think anyone really anticipated having this many loans being pushed out there. It's still very much a work in progress."
While Seppala acknowledged the process is taking longer than he hoped, his focus remains on getting this money into the hands of employers, who in turn can pay their employees.
"The sooner people can get back to work the better, but first we've got to beat this virus," Seppala said. "We keep hearing glimmers of good news on the virus front, but at the end of the day we've got to beat this thing, and then we can worry about getting back to work. "