PPP Loans Go Much Easier This Time Around, Utah Banks Say

SALT LAKE CITY – This month not only marks the start of a new year, but it also marks what could be a new beginning for hundreds of local businesses impacted by the economic turmoil caused by the global pandemic.

This week, small businesses will begin receiving highly anticipated forgivable loans as part of the latest round of the Congress-approved paycheck protection program. Money that could mean the difference between metaphorical “life and death” for some who struggle to keep their doors open.

For example, when the coronavirus epidemic hit last spring, Brad Shepherd – the owner of All Star Bowling & Entertainment – found his livelihood and those of his 300 employees in immediate jeopardy.

“We were forced to close on March 16. Before that, business was obviously horrible with the pandemic and all the media trying to keep everyone from going to public places, from going to our types of places that are entertainment restaurants. Eventually they closed us and that was a blessing as it was so horrible we better close then.

From there, the situation deteriorated and he was forced to lay off 225 employees while his various locations were closed for up to three consecutive months. Over time, it has been able to increase its workforce to 150 people, which is still insufficient to provide the kind of customer service its customers have come to expect. Then, to make matters more difficult, the spread of COVID-19 has increased.

“The comeback has been pretty awful. Once we opened it was pretty bad, ”he said. “We were pretty optimistic and then of course in June we kind of got everyone back to work and then things got worse.”

Connor Gallimore helps set up Tevahina Tupua, 6, right, and her cousin, Kaleah Sao, 13, to play Hologate, a virtual reality game, at All Star Bowling & Entertainment in Draper on Tuesday, January 26, 2021 .
Spenser Heaps, Deseret News

The rise in infections last spring forced massive shutdowns that severely affected the food and entertainment industries. Losing money quickly, businesses found themselves in a lifeline when Congress developed the Paycheck Protection Program to help small businesses stay afloat.

Shepherd quickly applied and received a six-figure loan that saved his business from shutting down for good. Last week he applied for a second PPP loan to keep the business going. Despite the difficulties of the past few months, he maintains a positive attitude that eventually the situation will return to some semblance of normalcy.

“We are just trying to survive,” he said.

As for-profit businesses struggle to stay alive, so do organizations that aren’t “there for the money.”

The Association for Vascular Access is a 501 C (6) non-profit entity that supports healthcare professionals in the healthcare industry, especially those involved in the administration of intravenous care. Normally, the association, which operates mostly virtually and employs six people, provides information and education to its members electronically as well as through an annual conference where it raises the lion’s share of its budget. operation.

Unfortunately, the pandemic prevented organizers from hosting the event in 2020, which usually took place in person, explained director of operations Tonya Hutchison.

“We were unable to host a face-to-face conference last year due to the pandemic and because our members are those frontline workers providing care in hospitals, they were unable to travel. She said.

When PPP loans were first made available last year, the association could not apply because the program was not intended for 501 C (6) non-profit organizations. However, this requirement was changed for the last cycle, giving the association the opportunity to apply for funding.

“It helps us continue with our mission and vision at a time when we had a significant decrease in our funds last year,” said Hutchison. “This will allow us to continue paying our salaries and hopefully have a face to face conference this year.”

Matt Prejean, left, and Shawn Johnson work in the cafe at All Star Bowling & Entertainment in Draper on Tuesday, January 26, 2021.

Matt Prejean, left, and Shawn Johnson work in the All Star Bowling & Entertainment café in Draper on Tuesday, January 26, 2021.
Spenser Heaps, Deseret News

Having lost more than 25% of its annual revenue in 2020, the organization was approved for just under $ 200,000, which should be enough to keep the operation going in the short term, she said. Without this financial assistance, the group would be in dire straits.

“It helps us to keep paying our staff, not having to go through pay cuts and not having to fire people,” she said. “We were very lucky. We had to reduce expenses, obviously, travel, there was no upgrade this year in terms of employee equipment. There were a lot of areas that we just had to narrow down so that we couldn’t hold our annual event. “

While small businesses are grateful for improvements to the system that will help their businesses survive, lenders tout the improved guidance of the US Small Business Administration in giving them the information they need to process loan applications and distribute funds more effectively. efficient and faster.

“It’s a little easier to do right now because the Small Business Administration (offices) is now a little more configured to accept applications,” said Roger Christensen, senior vice president of communications, marketing and development. sales representative for the Ogden-based bank. from Utah. “The system is a lot more polished, so I think it should be a lot smoother this time around than last time.”

In 2020, Zions Bancorp processed 47,828 PPP loans, ranking ninth nationally, said Rob Brough, executive vice president of marketing and communications at Zions Bank. About 11,000 of those loans went to companies in Utah, ranking Zions as the state’s top PPP lender. Since the PPP program reopened last week, the company has received more than 20,000 new applications, he said.

“The companies were better prepared this time around because they know the program better and experienced it last year, so they are better prepared,” he said. “It also helped make this process smooth this time around. It’s really on three fronts – from the SBA, from the bank side and also from the borrower side. They were better prepared to enter this application process.

Scott Anderson, president and CEO of Zions Bank, said the average loan amount his organization distributed in the first round of funding was around $ 150,000, while the latter round is closer to $ 100,000.

Connor Gallimore is helping set up 13-year-old Kaleah Sao to play Hologate, a virtual reality game, at All Star Bowling & Entertainment in Draper on Tuesday, January 26, 2021.

Connor Gallimore helps set up 13-year-old Kaleah Sao to play Hologate, a virtual reality game, at All Star Bowling & Entertainment in Draper on Tuesday, January 26, 2021.
Spenser Heaps, Deseret News

“We saw a lot of applications coming in early on (of the submission period), the flow has (decreased) since then, but it has remained stable,” he said. “We actually opened our digital application online four days before we could actually submit any nominations to the SBA.”

Because of the extra preparation, the bank was able to process loan documents through the local Small Business Administration office as soon as the new finance program was open for applications, he said.

Last year, Utah lenders processed 52,125 PPP loans totaling $ 5.3 billion, for an average loan amount of $ 100,766. Of these loans, Wells Fargo made just over 2,000 for a total of $ 111 million, with an average loan amount of nearly $ 54,300.

With 89% of the money in those loans for less than $ 100,000, Wells Fargo small business manager Brandon Meredith said the funding had helped hundreds of local small businesses survive the worst. of the economic crisis. With this latest cycle, new rules have been implemented to help them access the financial resources they need to survive the impact of the ongoing pandemic, he said.

“For businesses that have really been damaged by a pandemic, say for example restaurants, they may actually qualify for up to 3 1/2 times their monthly payroll, which is different from the first round,” Meredith explained. . “So the SBA has done a good job providing advice to target industries and companies that have really suffered from the pandemic. “

Shawn Johnson, left, chats with General Manager Jarred Potter of All Star Bowling &;  Entertainment in Draper on Tuesday January 26, 2021.

Shawn Johnson, left, chats with general manager Jarred Potter of All Star Bowling & Entertainment in Draper on Tuesday, January 26, 2021.
Spenser Heaps, Deseret News

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