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HU3 - Huntington Bancshares Inc News Story

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Sector
Financials
Size
Large Cap
Market Cap £7.29bn
Enterprise Value £15.15bn
Revenue £3.56bn
Position in Universe 117th / 1040

U.S. small businesses wait impatiently for government aid that could be slow to come

Wed 1st April, 2020 12:00pm
By David Henry, Heather Timmons and Elizabeth Dilts Marshall
    NEW YORK/WASHINGTON, April 1 (Reuters) - As soon as New York
officials began detailing their response to the coronavirus,
Matt Preis knew his staff might be in trouble.
    His Brooklyn-based pet company Chuck & Buddha's cares for
animals while their owners work or travel. But as his customers
suddenly found themselves at home under government orders,
business dried up.
    "I have never seen anything like this in my lifetime," said
Preis, who employs three full-time workers and several others
part-time. "Even the downturn in 2008 didn't affect independent
dog walkers too much, except there were a lot more of us all of
a sudden."
    Like many other small-business owners who spoke to Reuters,
Preis is hoping new government programs might keep him afloat.
    But the application process can be confusing, with local,
state and federal programs touting initiatives that do not
immediately offer much-needed access to cash. And while the
federal government wants to disperse funds quickly, logistical
hurdles - including a lack of staff to vet mountains of
applications - will be hard to overcome.
    Over the past few days, Preis has contacted relevant
agencies, his bank and financial advisers. As of Tuesday
afternoon, he had been given just two hyperlinks and was working
on applications. 
    "I don't know what the future holds for many small
companies, which include our mom-and-pop dog-walking operation,"
Preis said.
    Seeking to help millions of business owners who have seen
their operations either shut down or dramatically curtailed by
the coronavirus pandemic, Congress last week passed a $2
trillion stimulus package that includes $349 billion aimed at
small firms through the Payroll Protection Program.
    It covers eight weeks of payroll and some other operating
expenses through a forgivable loan of up to $10 million for
businesses that have roughly 500 or fewer employees.
    The program is retroactive from Feb. 15 so employers who
laid off workers can re-hire them through June 30, according to
guidance provided by the Treasury Department on Tuesday. It
appears to offer broad coverage, including for self-employed
individuals, independent contractors, non-profits,
military-veteran organizations and tribal groups.
    "Speed is the operative word," Jovita Carranza,
administrator of the Small Business Administration (SBA), said
in a statement. The SBA is the main agency through which money
will flow from the Treasury Department.
    But for many owners, relief may not come quick enough -
their revenues and supplies gutted after many local and state
governments ordered business closures in mid-March. Some
authorities have also expanded restrictions since then. 
    Kelly Klein, CEO of Groennfell Meadery in Saint Albans,
Vermont, whose business has basically shut down said she has not
gotten clear information about the federal loan program, despite
reading information online and talking to her banker.
    Her five employees are waiting to hear if they remain
employed after May.
    "Without something we wouldn't be able to keep our
employees," she said. " My biggest goal is to keep them and of
course make sure there's a business for them to come back and
work for."
    
    EASIER SAID THAN DONE
    The SBA is sure to be overwhelmed. It issued $28 billion in
loans last year, and will have to process more than 10 times
that amount in just three months with limited staff, sources in
Washington and in the banking industry told Reuters.
    Many declined to be identified as they were not authorized
to speak about it.
    Complicating matters, the White House wants to be the
clearinghouse for all information about the coronavirus, making
it hard for agencies to help banks understand the program
better, people briefed on the discussions about the program
said.
    Lenders must verify that borrowers had specific employees on
their books at the time they claim, and that their other costs
are legitimate, which can take time. They must also follow
requirements to prevent fraud and protect customer information
under the Bank Secrecy Act.
    "This is the kind of program that in ordinary times would
take a year to get started," said Greg Baer, CEO of the Bank
Policy Institute.
    Banks have been telling customers to be patient and asking
them to get relevant paperwork ready so that loans are processed
quickly when it all comes together. Some expect cash to begin
moving as soon as Friday.
    Huntington Bancshares Inc  HBAN.O  CEO Stephen Steinour said
he expects to have staff working seven days a week on extended
shifts through the end of June and to hire outside contractors
for additional support.
    "There's going to be an enormous flow," he said. 

 (Reporting by David Henry and Elizabeth Dilts Marshall in New
York and Heather Timmons in Washington; Additional reporting by
Andy Sullivan and Imani Moise; Writing by Lauren Tara LaCapra;
Editing by Edwina Gibbs)
 ((lauren.lacapra@thomsonreuters.com; 646-223-6320; Reuters
Messaging: lauren.lacapra.thomsonreuters.com@reuters.net))
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