When Joseph Levey logged in to Chase Bank’s lending portal early Tuesday, he hoped he would finally be able to submit his law firm’s application for a federal stimulus loan. He had been trying since the previous Friday.

“One of the C.P.A.s I work with was just heading home at 6 a.m.,” said Mr. Levey, founding partner of the Manhattan firm Helbraun Levey. “Chase’s application portal didn’t open until Monday night, and it kept crashing.”

Like Mr. Levey, small-business owners around the country are racing to secure their portion of the Paycheck Protection Program, a $349 billion relief program that Congress authorized to help them survive the pandemic and keep their employees on the payroll.

Because the loans are first come first served, many business owners are panicked that the money will run out before their applications are approved. They are also trying to figure out exactly what the program does, and whether the terms make sense or if they should lay off their workers despite already skyrocketing unemployment claims.

Mr. Levey successfully submitted his application. But he still had hundreds more applications to file — with Chase alone — on behalf of his clients, many of whom are in the hospitality and cannabis industries.

Treasury Secretary Steven Mnuchin said on Tuesday that he had asked lawmakers for an additional $250 billion for the payroll program, but it was up to Congress to allocate any additional funding.

The loans, which are a part of the $2 trillion relief program Congress enacted last month, could be a lifeline for Tran Wills and the 43 employees of Base Coat, her chain of nail salons in Colorado and California.

The program is designed to help businesses with fewer than 500 employees by lending them up to two months of payroll costs, with each loan capped at $10 million. Self-employed and contract workers are also eligible, but their loan process didn’t start until Friday.

These relief loans are issued through Small Business Administration-approved lenders and, unlike loans in previous crises, don’t require any personal guarantee or collateral from borrowers. The money is intended to primarily cover payroll, but funds can be used for other expenses that are legal as long as the loan is repaid at an interest rate of 1 percent over two years.

However, the federal government will forgive the loans if a business uses at least 75 percent of the funds to maintain its payroll at pre-pandemic levels for eight weeks after the loan is disbursed (based on a 40-hour workweek). The remaining money can be used only to pay for certain expenses, such as a mortgage, rent and utilities.

In most cases, the S.B.A. is using payrolls as of Feb. 15 as its definition of pre-pandemic levels.

The fact that the loan is essentially a grant is a key reason Ms. Wills has worked so hard to get in line. She tried to apply at Chase and U.S. Bank before successfully submitting her application at Sunflower Bank, a small community lender based in Denver.

Ms. Wills decided not to lay off her staff even though the salon is closed, because she had heard the grant would require her to maintain full staffing without interruption. Her staff is working from home with reduced hours and wages, helping her teach classes and fulfill online orders for Base Coat’s nail polish line. Some employees have also filed for unemployment benefits to make up the difference.

If Ms. Wills had laid off her team, she would still be eligible for the grant once she brought the team back — but that fact was initially unclear. The Treasury Department recently clarified that businesses must rehire staff (or employ new workers) and return their payrolls to February levels by June 30, when the loan program is set to expire.

She thinks keeping her employees was the right move because many of them have been with her since she opened in 2013 and because she believes there will be high demand once she reopens.

“We’re going to be crying at the end of the day because we’ll be so busy,” Ms. Wills said.

However, if the loan doesn’t come through or businesses aren’t able to reopen in May, the story changes. Ms. Wills said she wouldn’t have the money to keep paying anyone, even after canceling her utilities and negotiating rent deals.

“I’m OK until mid-May,” Ms. Wills said. “But after that, nobody is going to have money to buy things online to keep us alive.”

Some economists are warning that program loans in the stimulus package, known as the CARES Act, may not be a great fit for all businesses — even if they can get them.

“A lot of businesses know their revenue isn’t going back to February levels by the beginning of May, so they might be better off using other provisions of the CARES Act, like the expanded unemployment benefits,” said Betsey Stevenson, professor of economics and public policy at the University of Michigan and former chief economist for the Department of Labor.

That’s the decision that Ivy Mix and her business partners made for their staff at the Brooklyn bar Leyenda. Instead of taking out a payroll program loan, they closed in mid-March and laid off 24 people until they learned more.

The owners made their decision after realizing that the funds would most likely have to be spent before they could reopen. If they received the money in late April, they would be paying employees to stay at home rather than having the cash when they knew they could be open.

“We don’t know what’s going to be happening, and we almost certainly won’t be running at 100 percent capacity when we do, whether that’s because of legal restrictions or people’s fear,” Ms. Mix said. “So this grant will become a loan.”

And a loan scares Ms. Mix. In its nearly five years, the bar has operated without debt, and she doesn’t want to take any on now.

“We’d rather tell our employees to file for unemployment benefits,” she said. “We have a better chance of staying in business if we reopen and hire them back then.”

That’s a common refrain from Mr. Levey’s clients. Businesses, he said, don’t want to take a payroll loan and hire workers back, then have to fire them again in eight weeks because restaurants aren’t open.

“The program makes a lot of sense for law firms, accounting firms, any of the professional firms where people can still do work from home,” Mr. Levey said. “P.P.P. loans for people who are not doing business right now don’t work unless the applicant is of the mind-set that they are trying not to lose their key people.”

Some workers prefer to be laid off than have their employers keep them on through the program. The stimulus package expanded unemployment benefits widely, allowing people who need to stay home to care for sick loved ones or for children. It also added a $600 subsidy to each weekly check for up to four months.

In a state like Michigan, where the maximum weekly unemployment benefit is normally $362, some workers can now receive up to $962 per week. Once they have applied and their eligibility and state award amount are determined, the $600 is added to their checks. Workers haven’t seen that cash yet, but it will be retroactive for people who began filing March 29.

Even with delays and the potential that they will be job hunting in a few months, the extra cash is attractive to some employees.

“I’ve had a lot of clients over the last week say there is no way I’m going to get these people to come back to work,” Mr. Levey said.

And that puts business owners in a conundrum. Do they take paycheck protection knowing that their employees might be better off on unemployment? What do essential businesses do if a worker doesn’t want to go in?

That’s the challenge facing Liz Blondy, the owner of Canine to Five, a dog day care in Detroit.

When Michigan’s stay-at-home order was announced, Ms. Blondy laid off 70 of her 90 workers and saw her business drop by 95 percent. She kept on six salaried managers and three hourly employees to help care for the pets of essential workers. She didn’t know yet that the program would be an option or what the terms were. Now, she is trying to apply and considering bringing her team back.

But some of the workers have said they’d rather stay on unemployment or be laid off.

“If you don’t feel comfortable leaving your house in a pandemic, I am not going to push you. That’s not fair,” Ms. Blondy said. “But I might not have work for you in the future.”

She said she wished the unemployment system were clearer about how to handle situations like these. Can employees refuse work? Does she have to challenge their unemployment claim — something she doesn’t want to do? Can it be considered fraud if she doesn’t?

A spokeswoman for the Department of Labor said Wednesday that states could interpret their own laws and that employers weren’t responsible for challenging unemployment claims. But in general, “individuals that quit without good cause or refuse suitable offers of employment are not eligible for benefits.”

Ms. Blondy still intends to apply when her lender, Comerica Bank, finally opens its portal. By Thursday night, Comerica still hadn’t given business customers access to applications.

“I am going to be paralyzed by indecision for the next week as I figure this out,” Ms. Blondy said. “But it’s relatively inexpensive money, and it will help me through this time even if it’s not forgivable in the end.”

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