Paycheck Protection Program, Signature Small Business Aid Effort, Ends - The New York Times

Paycheck Protection Program, Signature Small Business Aid Effort, Ends - The New York Times


Paycheck Protection Program, Signature Small Business Aid Effort, Ends - The New York Times

Posted: 30 Jun 2020 08:03 AM PDT

After a stumbling start three months ago, the government's centerpiece relief program for small businesses is ending with money left over.

The Paycheck Protection Program is scheduled to wrap up on Tuesday after handing out $520 billion in loans meant to preserve workers' jobs during the coronavirus pandemic. But as new outbreaks spike across the country and force many states to rethink their plans to reopen businesses, the program is closing down with more than $130 billion still in its coffers.

"The fact that it was able to reach so far into the small-business sector is a major achievement, and those things are worth acknowledging, and celebrating," said John Lettieri, the chief executive of the Economic Innovation Group, a think tank focused on entrepreneurship. "But we're still in a public health crisis, and we're facing a long, slow, uneven return. Millions of businesses still have their survival at risk."

The hastily constructed and frequently chaotic aid program, run by the Small Business Administration but carried out through banks, handed out money to nearly five million businesses nationwide, giving them low-interest loans to cover roughly two and a half months of their typical payroll costs. Those that use most of the money to pay employees can have their debt forgiven.

The cash went to a wide variety of companies: manufacturing firms with hundreds of workers, Main Street retailers with a few dozen employees, and freelancers working for themselves. The loans ranged from a few hundred dollars to $10 million, and allowed businesses to keep paying employees — even if they had nothing to do but sit at home.

The program appears to have helped prevent the nation's staggering job losses from growing even worse. Hiring rebounded more than expected in May as companies in some of the hardest-hit industries, especially restaurants, restored millions of jobs by recalling laid-off workers and hiring new ones.

That's how it played out for Dr. Chris Stansbury, an optometrist who co-founded West Virginia Eye Consultants, which has seven offices around the southern part of the state. He furloughed 40 employees in late March after a statewide stay-at-home order, when his once-thriving practice was limited to emergency appointments only. For weeks, its sales were negligible.

The loan he received through the program on April 16 gave him a financial safety net as he began to reopen — with a host of new health precautions — in early May. Sales are back to around 90 percent of normal, and Dr. Stansbury said he was cautiously optimistic that the worst had passed for his business. Nearly all of his workers are back on the job.

Credit...Kristian Thacker for The New York Times
Credit...Kristian Thacker for The New York Times

"If we hadn't had this money to get us through, things would have been pretty dire," he said. "I don't think we would have been able to reopen all of our locations right away."

Other businesses didn't have such a smooth experience. The program was marred by technical problems — like overtaxed computer systems that crashed — and confusing, frequently revised rules that frustrated borrowers and lenders alike. Some banks limited their lending to companies with which they already had relationships.

After a rush of early demand — the initial $349 billion set aside for the program was gone in 13 days — borrowing slowed significantly. The money left over after the final applications are received late Tuesday will stay with the Treasury.

Lenders cited two main reasons there was money left over. First, most eligible companies that wanted a loan were ultimately able to obtain one. (The program limited each applicant to only one loan.) Also, the program's complicated and shifting requirements dissuaded some qualified borrowers, who feared they would be unable to get their loan forgiven.

Trying to comply with those rules was a challenge for many businesses.

Tracy Singleton closed her farm-to-table restaurant in Minneapolis, the Birchwood Cafe, in mid-March and laid off all but a handful of her 62 workers. She received a $382,200 loan in early April, a week after the program began, and soon spent it all — even though she won't be fully reopening any time soon.

"If I'd known the rules were going to change, I would have done it differently," Ms. Singleton said. "But I had to go with the rules as they were at the time."

When she received the loan, businesses had just eight weeks to spend the cash if they wanted to have the loan completely forgiven. So Ms. Singleton, who had switched to curbside pickup sales, brought back dozens of workers, brainstorming new projects for them to tackle. Her payroll ballooned from a skeleton crew of eight to a peak of 48 employees.

But as the clock ticked down to the end of her eight weeks of support, it became clearer to lawmakers that the downturn wasn't ending anytime soon.

Congress amended the loan program in early June to give recipients nearly six months to use their aid money, but Ms. Singleton had already spent most of her funds. When the money ran out, she laid off workers again. She is down to a staff of about 20.

"We looked at this as a bridge," she said. "Then our time was up, and there's no solid ground to stand on yet."

Some will cheer the program's end. Jon Winick, the chief executive of Clark Street Capital, a firm that advises lenders, predicted "screams of joy" from banks that are ready to be done with the headaches of issuing new loans. But few believe that the nation's small businesses are ready to stand on their own without further federal aid.

With Congress bitterly divided about what any new stimulus package should look like, little other help is on offer. Companies with fewer than 500 workers can turn to another Small Business Administration program, the Economic Injury Disaster Loan fund, but it has struggled with overwhelming demand and has imposed a $150,000 cap on its loans. The Federal Reserve's new Main Street Lending Program offers loans of $250,000 and more, but on more onerous terms.

That leaves companies — and their employees — in a vulnerable spot. Small businesses employ about half of America's nongovernment workers, and a fresh wave of deep reductions or permanent closures would quickly cascade through the national economy. The pain would be even more acute in hard-hit industries, like the service sector, and communities that disproportionately rely on small employers.

Some of those employers, like Ms. Singleton, are weighing their bottom lines against the continued uncertainty of the pandemic.

Even though Minnesota has allowed restaurants to reopen for outdoor dining and limited indoor seating, Ms. Singleton has stuck with curbside pickup. She is watching with dread as infection rates soar in areas that relaxed their restrictions and is wary of putting her employees or customers at risk.

"I frankly don't think it's safe," she said. "You can really only reopen once. If we had to open and shut down again, that would be a nightmare."

Pa. small businesses can apply for ‘grants, not loans’ starting on Tuesday - PennLive

Posted: 29 Jun 2020 02:57 PM PDT

Starting at 9 a.m. Tuesday, the window opens for applications from Pennsylvania small businesses to tap a $225 million grant program that is intended to help them recover their losses from the COVID-19 pandemic and reopen their doors.

The COVID-19 Relief Statewide Small Business Assistance program announced earlier this month by Gov. Tom Wolf, will accept applications for 10 days before closing until the second of four rounds of grant distributions begins in early August.

An application that can be accessed at pabusinessgrants.com.

Grants of between $5,000 and $50,000, depending on a business' revenues, will be issued by the state's 17 Community Development Financial Institutions within two weeks of the application period closing. Funding comes from the state's allotment of federal CARES Act dollars and has to be spent by Nov. 28 when unspent dollars must be returned to the federal government.

The grants, which are anticipated to help as many as 15,000 Pennsylvania businesses, will not be doled out on a first-come, first-served basis. Instead, the money will be distributed based on need.

"These are grants, not loans" and do not have to be repaid, said Senate Appropriations Committee Chairman Vincent Hughes of Philadelphia many times over during a Zoom call on Monday that had lawmakers, state officials and representatives of Community Development Financial Institutions participating.

Among the businesses planning to submit an application for a grant is Viviani Bros. of Clifton Heights, Delaware County.

Chris Viviani, a co-owner of the dry cleaning and laundry business that runs exclusively as a pick up and delivery service, said he hopes to receive a grant to help him restart and rebuild his business that has been around for 28 years.

"The pandemic for our industry couldn't have been timed worse," he said. "We lost our busiest quarter from a dry cleaning standpoint. It was the tuxedos. There were no weddings or proms. That's where we made the majority of our money. And now we're trying to come back at the worst quarter of the year."

His business model includes picking up clothing dropped off at storefront dry cleaners that don't have the equipment to clean it and going to office buildings and picking up laundry from individuals at their job site. But with so many offices switching to tele-commuting during the pandemic, he said they lost that business as well.

While they never fully shut down since March except for that initial 36-hour window when Gov. Tom Wolf labeled dry cleaners and laundromats as non-essential and then decided they were essential, Viviani said they basically were closed given the small amount of business that reduced their work week from a 48-hour week to a six-hour one. All eight employees they had on the payroll have been laid off.

"The average person wasn't going to work. They couldn't go anywhere funerals, weddings, church, bar mitzvahs, out to dinner, so nobody really had a need to get dressed," Viviani said. "I would say we're off at least 80%" of their usual business volume.

Small businesses that this grant program is designed to help are companies physically located in Pennsylvania that generate most of their money in the state, had 25 or fewer full-time equivalent employees prior to Feb. 15, and have annual revenues of $1 million or less before the pandemic hit.

While federal CARES Act funding has been made available to businesses through other programs offered by the federal government, Dan Betancourt of Lancaster-based Community First Fund said, "this program was created because we are aware the early federal stimulus dollars did not reach small Pennsylvania businesses."

The $225 million is being divided up to direct $100 million for the Main Street Business Revitalization Program for small businesses that experienced a COVID-19-related losses and $100 million for the Historically Disadvantaged Business Revitalization Program targeted to businesses with Black, Hispanic, Native American, Asian and Pacific Islander owners who suffered pandemic-related losses.

The remaining $25 million will go into the Loan Payment Deferment and Loss Reserve Program which will allow the Community Development Financial Institutions the opportunity to offer forbearance and payment relief for businesses in their loan portfolios that are struggling as well as to shore up these lenders themselves.

The network of Community Development Financial Institutions anticipate distributing $50 million of the grant money in each round. Businesses only have to apply once for a grant and those not funded in an earlier round will be considered for funding in subsequent rounds.

Hughes pointed out that an advantage of running the program through the Community Development Financial Institutions is it helps businesses connect with these institutions that can assist them in obtaining further capital to meet their needs. For example, he said there remains $100 billion in Paycheck Protection Program money that is still available that they can help businesses access.

"Understand that our small businesses are the economic engine of the state," said House Democratic Whip Jordan Harris of Philadelphia on the Zoom call. "Had it not been for these resources, we know that many of these businesses would not be able to open back up."

In particular, he spoke of the help it will provide minority and disadvantaged businesses and those owned by ex-offenders who are trying to rebuild their lives after coming through the criminal justice system.

"This is probably the largest infusion of capital for our minority-owned businesses that we have seen in a long time at the state level," Harris said.

Speaking of the civil unrest that has played out on the streets of the commonwealth and country in the aftermath of George Floyd's killing while in police custody, he said helping minority-owned businesses grow will start to level the playing field economically for them by providing them with the capital they need to grow and "to restore what COVID-19 has taken away from them."

Along with their most recent tax return, businesses will be required to provide a government-issued photo identification and proof they are doing business in Pennsylvania. The grant money can be used to for expenses incurred during the crisis or expenses incurred for a business to reopen, said Leslie Benoliel of Entrepreneur Works, a Philadelphia-area Community Development Financial Institution. But there is an exception, she said.

"If a business received funding from another source, they can't use these funds for the same use," Benoliel said. "But they can use it to pay employees, rent, buy inventory."

Jim Burnett of West Philadelphia Financial Services, another Philadelphia-based Community Development Financial Institution, added a business can use the grant money to advertise that they are back in business.

That is where Viviani said his business would put any money it would receive through this program so his customers know that Viviani Bros. is still around and ready to serve them.

"I want to say we're still here and if your needs have changed, we understand that. But we don't want our customers going somewhere else," he said. "It feels like starting your business all over again to try and figure out what you can do."

Jan Murphy may be reached at jmurphy@pennlive.com. Follow her on Twitter at @JanMurphy.

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80% of Small Business Owners Say Pandemic Hurt Business - 55% Feel Positive About Future - Small Business Trends

Posted: 30 Jun 2020 04:52 AM PDT

The coronavirus has affected most small businesses in one way or another. So if your small business has been suffering due to the ongoing coronavirus situation, you are not alone.

According to the latest survey from Tech.co, 80% of small business owners accepted that COVID-19 has hurt their businesses. However, a good thing is that 55% of small businesses are feeling positive for the future.



COVID Hurt Small Business, Majority Remains Optimistic

Needless to say, most small businesses operate on a limited operating budget. And the pandemic has caused supply disruption, an increase in supply cost, and lower demand for products/services. As a result, most small businesses have been suffering badly amid the COVID-19 crisis.

Though local authorities are easing lockdown restrictions, things are improving at a slower pace as there is no effective treatment of the disease yet and the confirmed cases of the disease are still rising

Key Findings of the Survey

The impact of coronavirus on small businesses is huge. With reduced incoming cash, most small businesses have found it difficult to stay afloat during the pandemic.

So there is no surprise that 80% of small business owners reported that the COVID-19 has had a negative impact on their businesses.

However, small business owners utilize the time of lockdown in learning new skills to grow their business. 76% of small businesses, as the survey reports, upskilled during the lockdown.

Search engine optimization, data analytics, social media, and learning a new language were the most common new skills small business owners tried to learn during the lockdown.

The trying times of coronavirus have not weakened the spirit of small business owners. They are optimistic about the future. Upskilling during the lockdown may have a small role in that. 55% of small businesses are positive about the future, the survey reports.

Tips to Reopen Your Small Business

With local authorities easing lockdown restrictions, more and more small businesses are going to open their operations, In fact, 53% of small businesses expect to reopen soon.

Being a small business owner yourself, you should make use of the available coronavirus resources to make a strategy to reopen your small business.

Following is a coronavirus reopening checklist for small business owners, which can help you safely resume your business activities:

  • Prepare a timeline for resuming your business operations to stay on the track
  • Invest in protective gears and sanitization stations to make your office and customer zones safe
  • Implement a strict cleaning policy to keep the spread of germs in check
  • Make a plan to support your employees emotionally to bust their stress

Also, you should draft an aggressive communication strategy to let your customers and prospects know that you are reopening your business with safety measures prescribed by the local authorities.

Furthermore, you should guide your sales and marketing team to address the challenges your audience is facing due to the pandemic. People remember businesses that go the extra mile to serve their customers.

About the Survey

Tech.co surveyed small businesses to get insights into how they have retained customers during the lockdown. The survey included 100 small business owners. Click here to know more about the findings of the survey.

Image: Depositphotos.com


Legislature supporting small business - Lakewood Sentinel

Posted: 30 Jun 2020 07:48 AM PDT

2020 has been an historic and unprecedented year. After months of pandemic news, lock downs and social distancing, this month the Colorado General Assembly and small businesses across the state turned their attentions to economic recovery.

Working closely with Simplify Colorado Sales Tax, a coalition of businesses, trade organizations and taxpayers, I'm pleased to report the passage of HB 20-1022 and a major step toward supporting Colorado small business. The bill is now on the way to Governor Polis' desk for signature.

The mission of the Simplify Colorado Sales Tax is one that I share: to reform Colorado's excessively complex sales and use tax system with fairness, simplicity, and predictability for business and a competitive economic environment in Colorado that will attract employers.

HB 20-1022 allows the Legislative Sales & Use Tax Simplification Task Force originally established in 2017 to continue its work to advance legislation in order to simplify Colorado 's sales and use tax system. Why is extending this task force so critical? In 2013, the Council on State Taxation rated Colorado as the fourth worst state in the country with a grade of "D" due to our complicated patchwork of more than local sales tax jurisdictions.

Over the last three years, the task force has made significant progress in a mission to make doing business in Colorado easier. One of the best examples of task force progress is the development of a streamlined data base that will provide administrative simplification. Along with several small businesses, I recently had the opportunity to observe the system and am pleased to report that we are well on our way to launching this critical resource.

Prior to the creation data base, business owners were faced with deciphering more than 700 different sales tax jurisdictions, piles of paperwork and multiple tax filings. Without this new system, Colorado's small businesses would face one more crippling barrier to success. At a time when Coloradans are struggling and we're all focusing on economic recovery, it is even more important to do everything we can to foster our small businesses. This system will streamline tax collections and allow Colorado businesses to do what they do best – create jobs and drive our economy.

According to the U.S. Small Business Administration, small businesses employ more than 1 million employees and 99% of all businesses. Simplifying the sales tax process to protect small businesses and our economy is not only a common-sense solution, but fiscally responsible and an absolute necessity.

State Representative Tracy Kraft-Tharp has been a small business owner and represents House District 29 in Jefferson County. She is a candidate for District 1 Jeffco Commissioner.

Nav Awards Atlanta Food Truck Operators $10000 Small Business Grant - KPVI News 6

Posted: 30 Jun 2020 07:00 AM PDT

SALT LAKE CITY, June 30, 2020 /PRNewswire/ -- Today, Nav, a service that gives business owners the fastest, easiest and most trusted path to financing, announced Detric Fox-Quinlan and Malik Rhasaan, owners and founders of Che Butter Jonez, Atlanta-based food truck, as the $10,000 winner of the company's Small Business Grant. 

Experience the interactive Multichannel News Release here: https://www.multivu.com/players/English/8570751-nav-small-business-grant-contest-winner/

"Access to capital is one of the biggest struggles that a business owner will encounter," shared Greg Ott, Nav CEO. "Now, couple that with an unprecedented pandemic and you've got an even bigger challenge. Over the last few weeks Che Butter Jonez has not only pushed through COVID complications, but they've used unexpected extra time to re-examine their businesses operations and determine what is holding them back from taking their business forward. We're excited to see how the couple uses the $10,000 to remove present hurdles, allowing them to focus on the future and grow the business of their dreams."

After noticing a lack of dining options in their community, the couple opened Che Butter Jonez in 2018 to help unite people of their community with quality comfort food. Prior to COVID-19 restrictions, the food truck was serving hundreds of customers weekly. The unprecedented hurdles of operating a food truck during a pandemic and state-mandated regulations significantly decreased revenues and forced them to focus on day-to-day survival rather than growth. On days of complete shutdown, the couple took time to evaluate their business, finding areas where simple improvements and changes could revolutionize their business.

"People assume that having a food truck is easier and more cost effective than having a bricks-and-mortar business," shared Malik Rhasaan. "The reality is that it's not. In fact, we've found that it's even more difficult for us to access the money we need to grow our business. The $10,000 from Nav is going to help us streamline and organize the backend of our business, affording us more time to focus on what keeps our loyal customers coming back and new ones coming in — the food."

Since they recently lost their base of operations location due to the impact of COVID, the couple plan to use the $10,000 prize to purchase equipment for a new base of operations that will be housed in a shipping container at a permanent location. Additionally, they will invest in a new point of sale system to help better organize their bookkeeping.

To learn more about Che Butter Jonez, read Nav's latest blog post.

Two other small businesses were also awarded monetary prizes in this round:

  • Inn at Horn Point, a family-owned and operated Bed & Breakfast in Annapolis, Maryland, received $2,000 to purchase resources to ensure patrons can easily adhere to social distancing parameters while dining, as well as increasing COVID compliance measures.
  • Antique Candle Co., a woman-owned candle-making business, was awarded $1,000 toward the purchase of new equipment to make components of the candle-making process more efficient, allowing team members more time to hand-pour candles.

The Nav Small Business Grant was established to bring awareness to the roadblocks that entrepreneurs encounter while chasing their dreams, and help them overcome these challenges. Earlier this year, Nav awarded $10,000 to Three Tree Coffee, a mission-driven coffee shop. Philip Klayman, Founder of Three Tree Coffee, used the $10,000 grant to purchase a weigh and fill machine to speed up production and reduce the labor cost of hand-weighing and packing individual units of bagged coffee. Since launching in 2018, Nav has awarded more than $80,000 to small businesses across the country.

About Nav
Nav gives business owners the fastest, easiest and most trusted path to financing & SBA funds. The leading Business Financial Management app, Nav hosts a robust marketplace with more than 110 business financing products, and gives business owners free access to personal and business credit reports from major consumer and commercial credit bureaus including Experian, Dun & Bradstreet, Equifax and TransUnion. The marketplace uses a unique, lender-neutral approach to help business owners find the best financing options for their needs. Nav's solution is also leveraged by other business service providers to enhance their customer experience. The company has offices near Silicon Valley, Philadelphia and Salt Lake City. To learn more, visit Nav.com.

CONTACT:
Amanda Triest
Nav PR Manager
atriest@nav.com
801-890-5024

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