Paycheck Protection Program back in business
Small businesses are the backbone of Cape Coral’s workforce, with more than 9,000 in existence, driving the economy in the area.
COVID-19 has resulted in a tremendous financial blow to these businesses in the Cape, across the state and throughout the country — some on the verge of, or have already had to close forever.
The U.S. Small Business Administration in early April began accepting applications for their Paycheck Protection Program (PPP), which they said is aimed to help businesses keep their workforce employed during this pandemic.
After the SBA controversially “ran out of money” in mid-April, they resumed accepting PPP applications on Monday, and even “kicked out” the “big boy” lenders for eight hours Wednesday so that smaller institutions can help their clientele.
“In order to ensure special access to the PPP loan program for the smallest lenders and their small business customers, the SBA is only accepting loans from lending institutions with asset sizes less than $1 billion from 4:00 p.m. EDT until 11:59 p.m. EDT on April 29, 2020,” read a joint statement from SBA Administrator Jovita Carranza and Secretary Steven T. Mnunchin. “SBA is working to ensure that all eligible small businesses have access to this funding to sustain their businesses and keep their employees on payroll.”
As of April 15, the SBA had approved $289 billion in loans for 1.3 million applicants.
The funding was replenished with $320 billion last Thursday, thanks to a Congress-approved and presidentially signed bill, including $60 billion set aside for smaller lenders.
“We encourage all approved lenders to process loan applications previously submitted by eligible borrowers and disburse funds expeditiously,” said Jovita and Mnunchin in a statement. “All eligible borrowers who need these funds should work with an approved lender to apply. Borrowers should carefully review PPP regulations and guidance and the certifications required to obtain a loan.”
Locally, both Lee County and Cape Coral government websites have information to guide local small businesses on where they can apply for assistance.
Cape Coral’s Economic Development Office has been in constant contact with local businesses trying to show them their best available path.
“I focus a lot of efforts, and so has all of my economic development team, on providing resources to our local businesses here so that they understand what’s available to them, best practices and how to keep going,” said Cape Coral EDO Business Recruitment/Retention Specialist Nita Whaley.
Other than the SBA PPP loan, small businesses can look into applying for the SBA’s Economic Injury Disaster Loan.
While getting money from the SBA is not as simple as applying and then, voila, you have your money, some Cape businesses have recently received their financial assistance while other continue to wait.
Leigh Anne Tollison, owner of Cape Coral small business Designs To a T, recently got a reprieve from the SBA after weeks of waiting and having to full out duplicate forms while details were being ironed out.
She got her eight weeks of payment protection after applying though a Cape Coral Busey Bank branch.
While Tollison does use one of the “big boys” for her banking needs, she opted to go for the local alternative.
She’s not sure if that helped her get money faster, slower, or anything in-between, but she does know they walked her through the process much more efficiently than her husband’s bank – you guessed it, one of the “big boys.”
“The people at Busey Bank took my application, walked me through everything I needed and we got in in the first round,” Tollison said. “My husband applied for it as well, through a big bank, and did not make the first round, and we’re not sure he’s in the second – there’s not a whole lot of communication.”
Tollison said while the initial application from SBA was easy enough, there was lots of back-up documentation needed. She brought those documents into Busey where they scanned and copied and got everything together. For her husband, he had to scan everything himself and submit it himself online, which is not a simplistic task for the technology-challenged.
“The people at Busey really cared, Tollison said. “The manager that was helping me personally called me when we knew the funding was secured and we both were just about in tears. It was a stressful two weeks, but all-in-all, it came through.”
The amount of the loan is dependent on the business’ payroll costs and the SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for “payroll, rent, mortgage interest or utilities.”
Make sure you can prove what you used the money for, because they will check.
“The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll),” reads the SBA website on PPP. “Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
“Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.”
The loan has a maturity of two years and a 1 percent interest rate.
Alex Czajkowski, owner of Yellow Monkey Entertainment out of Cape Coral, has seen nearly 90 percent of his work disappear thanks to coronavirus.
While many attempts from Czajkowski had gone without response, he finally got the word he should be getting some funding from SBA in the next 10 days.
“It wasn’t easy. It was not easy,” Czajkowski said. “I’m not sure how successful other businesses in the Cape have been. But it was more challenging than what I had expected it to be.”
Czajkowski applied through Regions Bank, after the SBA changed its tune from applying online to a local lender, and had nothing but good things to say about their role in getting him financial assistance.
His information was submitted the night after they initially ran out of funding in mid-April.
Yellow Monkey Entertainment lost $57,000 in a few phone calls thanks to COVID-19. They were set to provide all of the power for WWE’s Wrestlemania in Tampa that was supposed to take place early April. They also had contracts canceled for the U.S. Open Pickleball Championships in Naples as well as Ultra Fest Music Festival in Miami.
“It’s huge for my business to get this loan,” Czajkowski said. “We got hit quite a few different ways.”
The company has been limited to personal generator installations while these events have been cancelled.
They also are one of the only vendors in the country that works directly with Sunbelt Rentals, on their technical side, fixing generators. They’ve lost that work as well.
Any small business owners in Lee County looking for assistance can visit www.leegov.com/business for information and options or call 239-533-2273.
-Connect with this reporter on Twitter: @haddad_cj