By Terri Lynn Oldham House
If you are a local business and you haven’t looked into the Paycheck Protection Program (PPP), it’s about time you check it out.
The SUN had to cut staff due to the drastic reduction in advertising revenue as a result of local business closure orders. We were looking for options that would help keep us in business.
The stimulus bill (also called the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act) has some provisions intended to help small businesses and keep workers employed during the pandemic. The PPP is one component of that act.
At first, we were skeptical about actually getting any money from the government to help pay staff during the pandemic. The opportunity to view two webinars the day the application period opened convinced us that it was worth a shot to try.
You can borrow up to your average total monthly payroll costs from 2019 multiplied by 2.5.
We contacted local Small Business Association (SBA) lender Sherry Waner, who refers to herself and other SBA lenders as “frontline financial responders performing triage in our small rural community.”
We gathered the necessary documents while waiting to receive a link to the application.
When Waner’s office provided that link to apply, we were off and running from the comfort of our recliner in quarantine at home.
While there is no replacement for human interaction, there are some pluses here. You don’t have to have your hair brushed, there is no face-to-face required. You will need an Internet connection to apply online. It’s all automated, including e-signature documents, which conveniently complies with the current requirement of social distancing.
Yes, we applied while wearing our pajamas and slippers. There was no need to even put on shoes or drive to town. This was one of the easiest loan applications we’ve ever filled out.
By last Thursday morning, we discovered that we had been approved. We gathered our staff that afternoon for a meeting and asked them to report back to duty with their regular hours starting the next day.
The loan documents were ready to sign on Friday. Due to another obligation, we signed on Monday and had the funds deposited in our bank account that same day.
Talk about relief. We have eight weeks of payroll sitting in the bank and we can pay rent and utilities for two months.
It was that simple.
And, if we play our cards right, it will be free money for us.
The loan will essentially turn into a grant if all employees are kept on the payroll for eight weeks and the loan proceeds are used as intended for payroll, rent, mortgage interest or utilities.
And, if for some reason the loan isn’t completely forgiven, the remainder becomes a loan at 1 percent interest. There are no payments for the first six months, and after that, anything remaining is amortized over the next 18 months. That rate is way cheaper than maxing out your credit cards.
Do you happen to know someone in Archuleta County who owns a small business with fewer than 500 employees? Encourage them to look into the PPP. Even nonprofits can apply.
The SBA has posted information online about the loans and who can apply. Ask your lender for details. There are ads in this week’s paper for lenders who can help you with the process, and you don’t even have to be a customer to apply. There are also other loan programs available. Be sure to ask your banker about what program is best for you.
The PPP is intended to keep workers on the payroll. Your employees will be able to put food on their table, pay their rent and pay other bills. This will also help to put money back into the economy of our community.
The PPP is a hand up from the federal government that benefits the whole community when we take advantage of it. This is critical capital that businesses and their employees need to survive. We are all in this together.
The PPP loan didn’t fix all of The SUN’s financial problems caused by the pandemic. Like many businesses, our newspaper was dealt a financial blow. A nonprofit working to help keep newspapers running during the pandemic has set up an online donation site and some faithful readers even made donations before they could get a tax deduction for it. We also found a grant we are applying for this week.
The SBA’s loans are critical to helping Archuleta County businesses and our workforce get through this crisis. Together, we must all do what we can to save the economy of our community. But remember, time is of the essence and funds are not unlimited, so businesses should look into these relief programs as soon as possible.
Saving our community’s economy
By Terri Lynn Oldham House