What started as a mad dash for government cash has turned into questions about how business owners can spend all the money they receive from the U.S. Small Business Administration within eight weeks or risk having those bailout funds convert into more debt during an economic crisis.

Greg Deckard, president and CEO of State Bank Northwest, participated on a phone call Tuesday with officials from the U.S. Department of the Treasury. Deckard said businesses have done their part to sign clients up for the Payroll Protection Program through the SBA. But, the rules of the program are causing widespread concern.

“Every time they come out with more guidance, it creates more questions,” Deckard said. “Some businesses are withdrawing their applications or declining to close the loans because of issues, such as the eight-week funding confusion.”

As of Tuesday, the SBA had approved 1,131,000 applications totaling more than $263 billion of $349 billion allocated by Congress for the program. Of that, about $5 billion has been approved for businesses in Washington state, Deckard said.

While he praised the speed of the rollout, Deckard said Treasury and SBA officials could calm a lot of troubled business owners if they would relax the current rule that businesses use all their relief money within eight weeks. If not, the business owners may lose out on the chance for debt forgiveness and instead face a 1% interest loan that must be repaid within two years.

As the current rules sit, a banking institution has 10 days to fund the PPP loan once the federal agency approves the application. The business owner then has eight weeks to spend 75% or more on payroll and 25% on rent, utilities and other bills.

But several business owners don’t know whether Gov. Jay Inslee’s stay-at home order will remain in effect or if they will have customers within that eight-week window, Deckard said.

“It’s presenting challenges for small businesses. They want to know how to properly process their payroll to ensure the eligible expenses get accounted for properly under the loan program so they qualify for debt forgiveness,” he said. “Many people are seeing the loan documents for the first time and are saying, ‘What do I do.’”

The intent of the program was to get employees off unemployment. But, restaurant owners don’t know whether they will have customers and hoteliers don’t know whether they will have full rooms, said Jack Heath, president and chief operating officer of Spokane-based Washington Trust Bank.

He noted the PPP program was created at a time when President Donald Trump was hoping to re-open businesses by Easter.

“If you look at where we are today, obviously it’s changed significantly,” Heath said. “Business owners are anxious to get open. But it’s challenging to forecast when a business will open and when the right time is to bring staff back on board.

“There are a lot of moving pieces here,” he continued. “They don’t want to pull their employees off unemployment, pay them for eight weeks, and put them back on the unemployment rolls. It would be great if (Treasury and SBA) gave more latitude.”

Deckard, who serves as treasurer for the Independent Community Bankers of America, said he suggested during the conference call with Treasury extending the eight weeks to 10 weeks.

“The loan amount is not changing. Just give them 10 weeks to allow time for those same monies to be expended and still comply with the spirit of the program,” he said. “Every (approved) small business in the country is dealing with that.”

Heath said his bank has obtained approval for about $1 billion worth of the PPP loans, and he praised the work of federal officials who are trying to process the flood of requests.

“The thing that will drive us out of this economic slump are these small businesses opening up,” Heath said. “It’s absolutely critical. We have to take care of these businesses.”

While the bankers still are taking calls from business owners about applications, most calls have shifted to those businesses with loans, which average about $260,700 per application in Washington state, wondering how to comply, Heath said.

“The question is timing,” Heath said. “Will business be back as normal in two months? If so, this will work very effectively. But visibility forward in this environment is very murky.”

Deckard said he spent half of Monday dealing with approved businesses who don’t know how to proceed. He has one customer who wants to use the PPP money, as designed, to bring his employees back to work.

“But, he’s getting pushback because employees are making more money from unemployment than they would if they went back on the payroll of the small business,” he said. “Guess what. Nobody ever thought of that.”

Federal rules bar employers from double dipping, or receiving funds through PPP and from unemployment at the same time, he said.

“Banks are on the front lines trying to interpret this program,” Deckard said. “We can’t give legal advice, but we have communicated best practices in how to follow the rules and the intent of the program.”