Businesses get big boost
VIENNA, W.Va. — In October, M.J. Ayson-Lemon purchased the Vienna location of the Pottery Place from the former owner after managing the walk-in ceramics and canvas studio for four years.
She renamed it the Watering Can Art Studio, added more art classes and in January, she remodeled it into the “art studio I’ve always dreamed of.”
On Monday, she signed the documents for a Small Business Administration loan to help keep the dream going as businesses around the country struggle to adapt to the new realities of the coronavirus pandemic.
“This gives me breathing room,” Ayson-Lemon said, noting it will allow her to continue paying her nearly one dozen part-time employees and full-time assistant manager.
“I planned on keeping them on payroll until I couldn’t pay them anymore. I think I would have been good for three payroll periods until I would have had to stop.”
The Paycheck Protection loan program was established by the Coronavirus Aid, Relief and Economic Security Act passed in March.
The loans are for up to $10 million, with an interest rate of 1 percent.
They can be fully or partially forgiven if the recipient shows the money went to retain or rehire employees and pay some overhead expenses through June 30.
Banks started accepting applications for the loans on April 3. Technical issues with the SBA’s website for the program, high demand and still-developing regulations made the process uneven for applicants and lenders alike.
Ayson-Lemon said the process was “a little harrowing” to start, with the biggest challenge getting all the needed documents together. She said she was grateful for the assistance of the Chamber of Commerce of the Mid-Ohio Valley, the Contemporary Ceramics Studio Association and her local bank in navigating the process.
But even then, some uncertainty remained.
Ayson-Lemon declined to disclose how much she received but said it was enough to cover two-and-a-half pay periods. She was expecting more, but said it seemed like the details changed after her initial application.
“I’m grateful for whatever I get,” she said.
Washington, Pa., attorney Jack Puskar said he filled out an inquiry form with his bank the day the program opened, but he had yet to submit a full application as of last week.
“They said if you filled out the ‘contact us for more information form,’ we will get back to you,” he said.
With Pennsylvania’s courts closed for all “non-essential matters” through at least May 1, Puskar said his firm’s business — primarily criminal defense and family law — is down by more than 50 percent. A paralegal, law clerk and office manager have been laid off, and the workload of an independent contractor attorney “has been reduced involuntarily,” Puskar said.
“We still have work to do, and I’m trying to do it all myself, which is insurmountable,” he said.
The loan would get the laid-off employees out of a financial bind and relieve Puskar of the extra workload, he said.
Jeff Spengler, a partner with the Pittsburgh office of accounting firm Baker-Tilly, said his clients saw a mixed response in the first week of applications.
“I think it’s becoming clearer each day that the employers are anxious,” he said. “It appears to be a first-come, first-served, so everyone wants to be in line.”
In Kansas, Sean Gerrity and Dave Heinz employed 80 people between their Henry T’s Bar & Grill locations in Lawrence and Topeka and the Yankee Tank Brewing Co. With the restaurants closed for dine-in service, only about 20 people are working at a time.
The bank with which Gerrity typically works was only accepting applications from single-owner businesses initially. Henry T’s didn’t get to apply until Tuesday.
Having to wait made him nervous about his prospects. But now that he’s in the system, Gerrity said he wonders how well the program will work.
With unemployment benefits being expanded as part of stimulus efforts, some workers could make more not being on the job, he said.
“That’s going to be the most difficult thing trying to find enough work for people and trying to find people who want to go off of unemployment,” Gerrity said. “In order to get people to come back, we might have to pay them more.”
But he said he’s not sure if that is allowed under the rules of the program.
Simon Hargus owns First Settlement Physical Therapy, which employs 145 people at 23 locations in West Virginia and Ohio.
“Physical therapy is considered essential, but you have to be very judicious on who’s getting it, how many people are in a building,” he said. “The responsible thing to do is have a reduced caseload.”
Hargus said the application process was fairly straightforward but it was frustrating to wait for an answer.
“The bank would love to give us that feedback, but they weren’t able to for quite some time because of that (SBA) website crashing,” he said.
Now, Hargus is weighing whether to spend the money in time to have the loan forgiven or hang onto it longer and pay it back at the low interest rate. If he can do it, the latter might be more helpful in the long run, he said.
“You could technically get it all forgiven and spend it all by the end of June,” Hargus said. “We also don’t know when business levels return to normal. So there’s a lot of reasons to assume we’re still going to need capital past June.”