Summit County businesses scramble to apply for government funding
DILLON — In Summit County, local governments reacted swiftly to help businesses stay afloat during the coronavirus shutdown, setting aside hundreds of thousands of dollars in rent assistance.
These funds were meant to act as a bridge between the shutdown and the arrival of federal and state stimulus dollars. Now as federal business grants are available through the U.S. Small Business Administration, business owners are scrambling to apply.
Joseph Amato, the Small Business Administration’s Nevada District director, said that the first step to apply for the Paycheck Protection Program is to locate a lender. Lenders will ask for 2019 payroll information and corresponding 941 tax forms that tie into quarterly reporting. The bank then calculates the average monthly payroll of the business. If approved, businesses are loaned 2.5 times their average monthly payroll for 2019.
Amato noted that the Paycheck Protection Program has run out of money, but he anticipates more funding will be approved for a second round of applications.
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“My understanding is there is at least another $250 billion coming toward PPP and that hopefully will provide a sufficient amount of funding to cover the businesses that haven’t been covered yet,” Amato said.
Alpine Bank Regional President Matt Hanson said the hardest part of the Paycheck Protection Program loan process was simply getting it up and running. The Rocky Mountain bank had issues submitting clients’ applications using the online system and resorted to having employees submit the applications in the middle of the night when they had better luck.
“By the end of it, we were pretty close to probably a 36-hour turnaround from when you applied to when you actually got funded,” Hanson said.
During the first week of the program, Hanson said it was “all hands on deck.” He said employees were working 14-16 hours per day trying to help customers. Now that the funds have dried up, Hanson said the banks are just waiting for the next wave.
“We called it on Thursday when the funds stopped that this was kind of the eye of the storm, so we’ll be curious whether the next part of the storm is the second round of PPP or eight weeks from now when all of our customers are looking to see how they can get that loan or a great portion of it forgiven,” Hanson said.
Hanson said that for any bank that’s using the Paycheck Protection Program, the money is funded by that bank from the very beginning.
“The promise or the hope is that eight weeks from now, once the customer submits their … requirements to show that they have used a portion of it or a considerable portion of it for payroll, that’s when we should be able to apply back to the (Small Business Administration) based on the approved loan and say, ‘Hey, they used 75%. We ask for this to be forgiven.’ And the SBA will fund that money back (to the bank),” Hanson said.
As for this forgiveness aspect, Hanson said businesses should closely follow the guidance put out by the Small Business Administration.
Bill Waters — CEO of Swift Communications, which owns the Summit Daily News — said that once the Paycheck Protection Program money was approved, there was a “quick and steep learning curve” as to how it worked.
Waters recounted that on the afternoon of Saturday, April 4, he received an email from First Bank notifying customers that their portal was up to submit Paycheck Protection Program applications. Swift’s application was submitted late that night.
On Monday, April 6, Waters was notified by the bank that the loan had been authorized. Funding was received Tuesday, April 14. Waters said the forgiveness element is the “real beauty” of the loan. He said if it was a true loan, Swift and many other companies would not be able to pay it back.
According to the Small Business Administration website, loans will be forgiven “if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities” and that “at least 75% of the forgiven amount must have been used for payroll.”
Waters said that the loan is “critical” to Swift.
“Because revenues fell so fast, so dramatically in such a short period of time, we couldn’t really adjust expenses fast enough to offset that,” Waters said. “What this loan really does is buy us some time.”
Kayle Burns, owner of Petal and Bean floral and event business, also received a Paycheck Protection Program loan through First Bank.
Burns said that after submitting her application and being notified that it was received, she didn’t hear anything for about two weeks. Then, she was sent her closing documents and the money was quickly deposited into her bank account.
“It was such a weird process,” Burns said. “I wasn’t expecting money to just be deposited. I think that’s the trickiest part is trying to make sure that you do this correctly.”
Burns employs four to five seasonal employees with only one employee on a year-round salary. She plans to bring a few back who can work on projects and other tasks during the eight weeks of funding. She said that even if she doesn’t receive loan forgiveness, she still thinks the two-year loan is a “good deal” at a 1% interest rate.
Burns said she also applied for the Economic Injury Disaster Loan last week but has not heard back. The terms for the loan listed on the Small Business Administration website say the interest rate will not exceed 4% per year and repayment is based on ability to repay the loan.
Barre Forte Summit County studio owner Katelyn Huston said she applied for the Economic Injury Disaster Loan online in less than 10 minutes.
Huston has not heard back, and she said she does not expect much money because she does not technically employee anyone — barre instructors are independent contractors.
Huston said both loan programs don’t work well for companies that operate mainly with independent contractors.
“As a business owner, sometimes you don’t pay yourself or sometimes you take an owner’s draw,” Huston said. “It’s just so disheartening and discouraging right now.”
Editor’s note: Taylor Sienkiewicz is an employee of Swift Communications and is working to become an independent contractor for Barre Forte Summit County.
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