Pierce County, Congress making more money available for small businesses during coronavirus
Progress was made Tuesday on both the local and national fronts on getting more aid relief to small businesses amid the coronavirus outbreak.
The Pierce County Council on Tuesday approved an expansion of its COVID-19 Emergency Small Business Relief Loan Program, allowing for more businesses to apply, while the U.S. Senate approved another round of aid that increases funding for the Paycheck Protection Program by $310 billion and $60 billion for a separate small-business emergency grant and loan program. The House is expected to approve that legislation Thursday.
But there’s no quick recovery, as Gov. Jay Inslee also on Tuesday described the steps to be taken in the slow reopening of the state.
“We’re going to take steps and then monitor to see whether they work or if we must continue to adapt. We will not be able to lift many of those restrictions by May 4. And we will let you know when we can lift restrictions as soon as we know,” Inslee said in a speech televised and streamed around the state.
In the meantime, relief is coming in different forms.
County’s small-business loans
The council allocated $3 million for small business zero-interest loans, in which businesses can receive $1,000 per employee, up to $20,000 total.
The program serves:
▪ Businesses in Pierce County, both unincorporated and inside of incorporated cities.
▪ Businesses of 20 or fewer employees.
▪ Businesses that have had a change in ownership in past 12 months could be eligible.
The county program was created March 24 with an allocation of $640,000 and was focused on businesses of 10 or fewer workers in unincorporated Pierce County.
“As a Council, we are concerned with the significant health impacts of COVID-19, as well as the vitality of our communities. Our small businesses are the heart of the economic foundation of Pierce County,” said chairman Doug Richardson in a news release announcing the expansion.
The Economic Development Department started reviewing loan applications on March 26, and more than 198 applications have been received, including 86 companies located in incorporated Pierce County. With more than 55 loans approved, the initial funding had been nearly exhausted.
The council also increased funding for the Emergency Food Network, providing an additional $500,00 to the $250,000 previously approved in March 2020 for food banks in Pierce County.
PPP loans
Meanwhile, Congress’ action this week with a $484 billion bill is meant to help shore up the Payroll Protection Program, among other things.
The PPP loans offer companies and nonprofits with up to 500 workers a low-interest loan for up to two months’ payroll. Most if not all of the loan will be forgiven if the employer retains its workers and doesn’t cut wages.
For Christopher Jones, president of the Gig Harbor Film Festival, aid via the program has remained elusive.
“We’re a small nonprofit and very much feeling left out,” Jones wrote The News Tribune on April 6.
His organization first faced a delay for the program to launch at its bank, Columbia Bank. The program launched nationally April 3.
Eventually, the film festival organization’s application was accepted. But the acceptance coincided with the first wave of funding running out by April 16.
“Columbia Bank accepted our application for underwriting for PPP last week and was completed in the last day or two for under-writing details.,” Jones told The News Tribune via email.
While Jones said his organization met every deadline, it was told “federally allocated funds have been dispersed per the federal authorization. Further, we have received zero dollars or feedback on a FEMA emergency grant.”
Columbia Bank, in statements provided to The News Tribune through its media representative, said, “We can tell you that within 36 hours of launching the Paycheck Protection Program (PPP), we received more loan requests than we would typically receive over the course of six to eight months.
“Even though this round of funding has run out, we continue to process all loan requests that have not yet received an SBA E-Tran (electronic loan processing) number. ... We are diligently working to get remaining requests positioned for submission to the SBA when they reopen the program. At this time, we are strongly encouraging our clients who did not receive an E-Tran number in the first round of funding to continue the process with our bankers.”
Columbia Bank wasn’t alone in its delayed launch as SBA and Treasury guidance on processing the loans arrived just hours before the program was set to begin nationally, leaving many banks scrambling.
Jones’ organization also wasn’t alone in missing out on the first loans.
In a national survey released Monday, the National Federation of Independent Business (NFIB) reported that “about three-quarters of small-business owners have submitted an application for a PPP loan as of April 17.”
But, only about one-in-five (20 percent) of submitted applications had been fully processed with funds deposited in the borrower’s account, according to NFIB, with the rest still waiting.
It added that about 40 percent of small-business owners successfully submitted an application for an Economic Injury Disaster Loan through the SBA website, with about 77 percent requesting the emergency grant of up to $10,000.
“Of those who requested the EIDL emergency grant, about 10 percent have received the funds. Essentially, all of the EIDL applicants (99 percent) have yet to receive the loan,” NFIB reported.
Additionally, many loans nationwide went to larger companies publicly traded, allowed to file as separate subsidiaries. Some banks, including Wells Fargo, Bank of America and JPMorgan Chase, now face lawsuits over their handling of loans.
Even though Columbia Bank is not disclosing the number of loans it processed, another area bank’s numbers give some perspective on the demand.
A representative for KeyBank told The News Tribune, “Through April 15, KeyBank successfully processed approximately 35,000 applications from clients through the SBA, requesting $8.5 billion in funds from the Paycheck Protection Program,” adding, “the funds have been, or are in process of being distributed.”
For Jones, there may be a light at the end of the tunnel when it comes to the PPP loan.
“I’m told that we are in queue with Columbia Bank for immediate submission on the second round of money,” he said Tuesday. “The PPP money gives us a bridge to continue operations which will now lead to a major event in 2021.”
The 2020 season, though, isn’t happening.
In a statement posted on its website, the Gig Harbor group announced that the 2020 film festival would be canceled, and the organization will “suspend our other festival events for the remainder of the year.”
“We are canceling the 2020 Gig Harbor Film Festival because of a dramatic difficultly in raising donations at this time,” Jones told The News Tribune. “Sponsors and donors make up a large part of our budget.”
“The risk of COVID-19 to audiences packed in theaters, even in late September, is a risk that our board thought is too great,” he added.
More information on relief for businesses
▪ Pierce County COVID-19 Emergency Small Business Relief Loan Program: Businesses can apply online at https://bit.ly/3bqUlwo. For more information about the program, email PCSBRLoan@piercecountywa.gov or call 253-798-6150.
▪ Area list of SBA participating lenders (check to see whether they are accepting new clients): https://bit.ly/3auC28m
▪ Rapid Response South Sound: rapidresponsesouthsound.com
This story was originally published April 22, 2020 at 10:40 AM.
