Small businesses get pushed aside by big players for Covid-19 relief cash.

Richard Kuehn has spent the past 10 years building a business that sends caregivers into seniors’ homes throughout the Monterey Peninsula to assist them with what is known as the “seven activities of daily living.” His employees at Family In Home Caregiving help clients with things like bathing and grooming, dressing, meal preparation and feeding and using the restroom. It’s grueling work, and with an aging population, it’s also work that’s in high demand.

On average, he says, his company bills about $160,000 per month, but the pandemic has changed that and some clients have suspended their service for the time being. With revenue dropping and a desire to avoid laying off his crew, Kuehn had his paperwork together when the U.S. Small Business Administration’s Paycheck Protection Program opened on April 3 for applicants seeking low-interest loans to fund up to two-and-a-half months’ worth of payroll. He went through his bank, Wells Fargo, and asked for $160,000 through PPP, and he also applied for an SBA disaster loan.

“I submitted it within an hour of them opening the application, and all I’ve received are emails stating my application is being reviewed and we’ll get back to you,” Kuehn says. “I’ve been doing business with Wells since I opened, and I’ve done a lot with them and this is not acceptable.

“They say you can’t call or talk to anyone at the bank because the application is done online, and people at the branch can’t assist because they don’t know anything about it,” he says. “If we don’t get the PPP loan, I’m going to have to close the business.”

And if that happens, 16 people will lose their jobs.

“The PPP loan was supposed to be for small businesses,” Kuehn says, “and from what I’ve been reading, it’s large companies getting the money.”

It’s the same story for the nonprofit Sun Street Centers, which offers prevention, treatment and recovery programs to people addicted to drugs and alcohol. They’ve had to cut programming – part of what they do is go into schools and talk to kids about addiction issues – and they’ve had to slash their residential programs due to social distancing, meaning some beds need to remain empty. As a result, Sun Street has cut hours and laid off 10 of its 130 employees.

CEO Anna Foglia says Sun Street had its PPP application ready for $947,000 when the application period opened. But Sun Street’s bank – a regional one which Foglia declines to name because she’s holding out hope the loan will come through – kept telling them they weren’t ready to accept applications.

On April 13, after she said she was going elsewhere, they accepted the PPP application. They didn’t process it until noon on April 15, and by 5pm that day, the bank announced it had run through all its funding for the program. She submitted a second application to another bank, and now Sun Street waits.

“We’re an essential service barely hanging on and if it’s not meant for businesses like us, I don’t know who it’s meant for,” Foglia says. “I’m frankly suspicious that the head office was picking and choosing whose applications they would submit first. I think they didn’t pick us.”

Business attorney Jeannette Witten thinks there’s good reason for Foglia’s suspicion. Based on her research, and based on what she’s hearing from clients, it seems that some banks were cherry-picking and giving preference to moneyed clients.

Already, federal lawsuits have been filed against JP Morgan Chase, U.S. Bank, Wells Fargo and Bank of America by small-business owners, claiming negligent business practices and fraudulent advertising for their handling of the PPP loans.

Witten is contemplating filing suit on behalf of several clients who have had the same experiences – they applied for the program in a timely fashion and were held at arm’s length by their banks until – oops! – the money ran out.

“There are many very similarly situated people who were told the same thing by the banks – ‘be there when we open, you’re first in line’ – who didn’t get funded,” Witten says. “The claim by the banks that ‘by the time they got to the applications to process, the money was gone’ is, in my opinion, false.”

MARY DUAN writes Local Spin for Monterey County Weekly. Reach her at mary@mcweekly.comor follow her at twitter.com/maryrduan