The federal Payroll Protection Program provided nearly $660 billion in funding to American businesses during the pandemic. According to Small Business Administration (SBA) figures, more than 12,000 …
The federal Payroll Protection Program provided nearly $660 billion in funding to American businesses during the pandemic. According to Small Business Administration (SBA) figures, more than 12,000 loans totaling over $1 billion had been made to Wyoming businesses by the end of May.
The goal was to keep those businesses afloat and avoid layoffs while government restrictions related to the COVID-19 pandemic kept them from operating. If certain requirements were met, the loans can be forgiven. The forgiveness application and documentation came out at the end of May.
Hunter Clean Care was among the businesses that received a loan under the Payment Protection Program (PPP). Kriss Hunter, co-owner of the business, said Hunter Clean Care survived because of the assistance.
“It kept our doors open. Without that we couldn’t have kept our employees.”
Hunter said that starting around March, people in the area often hire Hunter Clean Care to clean decks and carpets as part of their spring cleaning. This year, the pandemic hit at that time and people were reluctant to bring others into their homes. Hunter lost a lot of important seasonal business.
So there are no deadlines for when businesses must apply for forgiveness, but banks and the SBA do have deadlines for processing and reviewing the applications.
At a May 26 Powell Economic Partnership advisory meeting, Daniel Diver and Nathan Keefer, certified public accountants with Whittle, Hamilton & Associates in Powell, briefly discussed the forgiveness application process.
When the initial PPP rules and eligibility requirements came out at the beginning of April, the applications changed rapidly. Diver said he expected more of the same with the forgiveness application.
“I put it on the corner of my desk for a while. I wasn’t going to read it, because it was going to change,” Diver said.
The applications for forgiveness are longer than the applications for the loans, and applicants will need to provide documentation of mortgage interest payments and lease agreements.
In order to be eligible for loan forgiveness, borrowers had to spend 75% of their loan amount on payroll, leaving the rest for utilities and operating expenses. Keefer said as long as businesses met that stipulation, they should receive forgiveness for the loan. If they laid off workers, they might not.
“I think in general people understood that they needed to use it to pay employees, but many had already laid off workers because they were part of the mandatory closures and could not use the employees services even if they were given the money to pay them,” Keefer said after the meeting. “I think many businesses understood that part of their money would most likely not be forgiven under this circumstance.”
During the PPP application process, Powell area applicants benefited from the service they’ve received from local banks, Diver said.
According to the SBA, nearly half of the entire PPP funding went through smaller banks with less than $10 billion in assets.
Diver said he had clients in other states who went through the larger banks and never got the kind of face-to-face service local banks have provided.
“They never talked to anybody. They submitted [their application online]. They didn’t hear anything” after that, he said.
Hunter went through Pinnacle Bank and said the bank was in constant communication, including alerting her to the forgiveness applications becoming available.
“They were amazing,” she said.
During a special session in May, the Wyoming Legislature used $325 million of federal CARES Act funding to create grant programs to help Wyoming businesses facing hardships related to the pandemic. Businesses with less than 51 employees can receive grants of up to $50,000 each.
Sen. R.J. Kost, R-Powell, said the Legislature considered a loan program like the PPP. However, if the federal money was paid back to the state, the state would be obligated to return the money to the federal government.
So, lawmakers instead set up grant programs and created special rules to allow the state to give money to small businesses, which state law prohibits. The applications are expected to become available any day now.
Amy Quick, northwest regional director for the Wyoming Business Council, explained at the PEP meeting that there’s a concern the state will see a similar demand for funds as the PPP. There were so many applicants and the federal program funding evaporated so fast that some business owners weren’t aware of the financial assistance until it was gone.
“That is one of our concerns, that the money will go quickly,” Quick said.
Congress appropriated more money for a second round of PPP and more than $100 billion remained available as of last week.
As for Wyoming’s new program, state officials have said priority will be granted to businesses that did not receive PPP funding — but any eligible business can apply.
Hunter said she’s aware the state funding will be available, but she’s not sure she’ll get an application submitted before the funding is gone. She’s hoping that with the restrictions lifted and more people going back to work, she won’t need it.
“We’re definitely hopeful,” Hunter said. “Fingers crossed, we won’t need anything more.”