The Paycheck Protection Program Is Out of Money—And America’s Small Designers Didn’t Get Much
Yesterday’s headlines that the $349 billion US program for small businesses is already out of funds has left American designers in the lurch. Some have open Paycheck Protection Program loan applications at participating banks, others have failed to get even that far. The PPP is a forgivable loan, granted by the federal government via the CARES Act with the understanding that business owners use the money for specific payments, among them rent, payroll, employee benefits, and utilities.
Victor Glemaud, a knitwear designer and CFDA/Vogue Fashion Fund alum, has applied for a Paycheck Protection Program loan at two banks, but was turned away both times after weeks of waiting and confusion. At one he was told that the bank wasn’t participating in the program, and at the other that the bank was still ramping up its participation. “What seemed possible at the beginning of the process has turned into a complete non-starter,” Glemaud tells Vogue. “We shipped spring in January, so I've been getting paid for that. I can scrape by. I've got strong factory support. I have family, friends, the support of my husband. There is a possibility I’ll have to close, but I’m going to do everything in my power not to go down that road.” He’s had better success applying for a small business loan through the global non-profit Accion. “At least there’s a thoughtful, thorough human on the other end of the telephone line.”
Gigi Burris, a milliner and Glemaud’s fellow CVFF finalist, secured an Employee Retention Grant through the city of New York to help her make payroll, in March. She described an efficient process that took 48 hours from downloading the forms to seeing the funds in her account. But she hasn’t had the same success securing a PPP loan, the conditions of which changed midway through her application process. “Originally, you were allowed to include subcontractors,” Burris explains. “I had quite a few 1099s, so I was eligible for quite a bit of forgivable funds.” With subcontractors no longer allotted for, Burris would’ve received no more than $20,000. Still, she says, “when the news came out yesterday I was really heartbroken. I have an open application with Bank of America. I had counted on getting it. We’re not talking about a huge amount of money of the trillions available, but not getting it is going to change the course of my next six months.” She’s turned to private grants like A Common Thread, the CFDA/Vogue initiative that was created to provide micro grants to young designers and small brands in economic distress due to the COVID-19 pandemic.
Rachel Comey, who has stores in New York and Los Angeles, has applied for five loans, but has been approved for just one so far, from PayPal. “We got approved in one hour, that one was easy,” she says. The rest? Not so much. “My main bank hasn’t even opened its PPP application process yet,” she says. “The PPP loan is the one we all want, and it’s the one that got exhausted yesterday. I know a million people that have applied and I haven’t heard of anyone who’s gotten one yet. Everybody—we’ve all been making operational changes, talking to our landlords, pushing out deliveries, doing everything we can to pause and still hold onto our orders. But it seems like the banks aren’t organized enough to accept the applications.” She continues: “I don’t feel confident in the process at all. When the rescue aid was announced I did feel more optimistic. Help was coming, and it was based on real numbers. But we’ve been in a holding pattern these last couple weeks, I really don’t know what’s going to happen next.”
Originally Appeared on Vogue
