When Judith Less applied for a loan under the Federal Paycheck Protection Program, she was hopeful the money could help cover the overhead costs of her Pompton Plains consignment store.

“I was hoping I had enough money to pay my rent,” Less said.

But when she got federal help, it was barely enough to pay for lunch. The grand total of PPP aid? Only $ 27.

“Twenty-seven dollars was mine,” she laughed. “I’m glad I don’t have to worry about paying so much back. “

Less isn’t the only small business owner to ask for a financial lifeline, just to get some cold water. The I-Team reviewed US Small Business Administration records and found over 300 small businesses in New York and New Jersey that obtained P3 loans worth less than $ 500. These include a Long Island home improvement company that received $ 59, an academic consultant from Red Bank that grossed $ 13, and a Toms River real estate company that got a PPP loan for exactly $ 7.

The explanation for most small PPP loans lies in the way the recipients have structured their businesses. Since many of the smaller businesses are classified as sole proprietors, they technically have no payroll.

Matthew Coleman, spokesperson for the SBA, said most loans are based on payroll.

“The purpose of PPP is to keep workers on the payroll and connected to their health insurance,” he said.

Individual companies by definition having no employees – or payroll – the amounts of their loans are calculated according to their 2019 net income.

Judith Less said her consignment shop, The Wise Old Owl, was not very profitable in 2019. But she asked why pre-profitability is a requirement for sole proprietors, when large companies can get thousands of dollars. dollars per employee – even if they weren’t. profitable.

“It’s just not fair for everyone,” Less said.

Some New York City employees say their businesses have obtained loans under the Paycheck Protection Program. But they were fired anyway. Chris Glorioso.

Representative Mikie Sherrill (D-Montclair), acknowledged that it was a particular challenge to help sole proprietors in the pandemic, but she also said that PPP has been largely successful, saving Main Street America from an even more disastrous fate.

“The bipartisan decision by Congress to pull this money out has left our economy on a better footing than almost any economy in the world,” Sherrill said.

The fact that many sole proprietorships do not qualify for substantial P3 loans is one of the reasons Sherrill said she co-sponsored the SMART Act, a bill to provide federal assistance to state governments. and local – so they can implement loan programs tailored to small businesses that slip through the cracks.

“The state or the county or even the municipalities within the city can look at the businesses and say, ‘I know this business,’” Sherrill said. “This is one of the reasons I have been such an advocate for public and local funding.”

The SBA told the I-Team that sole proprietorships who do not qualify for significant P3 funding may be eligible for the Economic Disaster Lending Program (EIDL), which offers non-repayable loans intended to help pay operating expenses.

“The SBA EIDL program would be another option for small businesses to deal with expenses that could not otherwise have been covered due to the coronavirus pandemic, especially if they are not covered as qualifying expenses that could be discounted as part of the PPP, ”said Coleman.

With black entrepreneurs denied loans twice as many as white applicants, black business owners say it’s time for more diversity among lenders. Reporting by Tracie Strahan from News 4.

Last week, the SBA opened a new pot of over $ 280 billion in P3 loans. The agency also released new rules aimed at eliminating benefits for large businesses, including a head start for applications from small community banks. The PPP loan forgiveness process is also simplified.

But some critics say it may be too easy for some well-heeled companies to write off their debts.

“These are not loans, we all know that. It’s free money, ”said David Lipshutz, family attorney in Stratford, New Jersey.

Last summer, Lipshutz wrote an op-ed in the New Jersey Law Journal criticizing white-shoe law firms for accepting P3 money when he said they didn’t really need it.

“I was just ashamed of my profession,” Lipshutz said. “I think they are just swindling the government. If I didn’t need it, they didn’t need it at all.