Consumer finance

Saved once by heavy aid, Salt Lake business owner hopes a new PPP can get her across the pandemic finish line

SALT LAKE CITY – Last year when the COVID-19 outbreak first hit, Marci Rasmussen’s downtown flower shop was one of those businesses that felt the direct impact .

“I immediately fired everyone,” she said. That meant all but one of its 15 employees.

Surviving the coronavirus pandemic as a small business has been particularly difficult. For those who were able to do it, this survival did not come without a lot of angst and at least a little help.

For longtime Salt Lake business owner Rasmussen and others, that good luck came in the form of the Paycheck Protection Program which was part of the federal government’s pandemic relief program. last year. Now, many of those same business owners are hoping to access a few more of those federal dollars approved in another aid bill passed in December to keep their businesses a little longer as the COVID-19 outbreak continues. to wreak financial havoc throughout the state. and the country.

As of this week, small businesses hit hard by the pandemic have been able to apply or reapply for the Paycheck Protection Program – a forgivable loan program established by the Law of 2020. help, relief and economic security from the coronavirus.

Rasmussen said she would be among those seeking another injection of federal aid.

Designer Rodrigo Cabral appraises flowers at Specially For You, your downtown florist in Salt Lake City on Tuesday, Jan. 12, 2021. Store owner Marci Rasmussen has applied for paycheck protection program funding during of the first round of stimulus last year to keep his business afloat and will also apply for the final round of funding.
Designer Rodrigo Cabral appraises flowers at Specially For You, your downtown florist in Salt Lake City on Tuesday, Jan. 12, 2021. Store owner Marci Rasmussen has applied for paycheck protection program funding during of the first round of stimulus last year to keep his business afloat and will also apply for the final round of funding. (Photo: Scott G Winterton, Deseret News)

“When (the government) first decided to shut down, my business fell off the cliff. (All of my) business accounts except one – there were 43 of them – restaurants and hotels that make flowers every day. week, ”Rasmussen said. “I lost 13 marriages. We probably had nine conventions set up and these were slowly canceled throughout the year.”

Fortunately, the layoffs were not permanent.

“We came in as a core business because we do funeral flowers so my daughter-in-law and I managed it until I got the PPP and the minute I got (the money ), I brought everyone back, ”she said.

Since then, she has seen her business recover slowly, but not to pre-pandemic levels. She estimated that she had lost 20% of her earnings in the past year and was earning just enough to get by at this point.

“I pay my bills and I pay my employees, but I don’t make any money,” Rasmussen said. “My profits don’t stay the same. (But) I’m really lucky because I’ve been here long enough to have been through three different recessions.

“I started out in a recession. I still have reinforcements, ”she said. “I keep money in the business. If my business has money in it, I don’t take the money (in profits) that I leave there.”

She plans to ask for the same $ 70,000 she received in the first round of funding, believing that this should be enough to sustain the business until the vaccines allow life to normalize.

Meanwhile, local lenders are bracing for the new wave of applicants when the new round of P3 funding becomes available. An expected difference for this cycle is the focus on involving community development finance institutions that serve small businesses rather than large lenders that serve large businesses and corporate clients, which drew criticism the first time around. .

“Only (community development finance institutions) are able (to accept applications) at this time … they were able to open their portals and they were able to start accepting applications for the first draws. (This week) they will be able to open up to a second draw, “said Tom Morgan, executive vice president of retail banking at Zions Bank. Small local lenders can accept first-time applicants and those like Rasmussen who will submit a second application, having received money during the initial funding of the CARES Act.

Natalie Rasmussen, left, and her mother-in-law Marci Rasmussen, owner of Especially For You, your downtown florist, create flower arrangements in the Salt Lake City boutique on Tuesday, January 12, 2021. Marci Rasmussen asked for the paycheck protection.  Funding for the program during the first round of stimulus last year to keep his business afloat and will also apply to the final round of funding.
Natalie Rasmussen, left, and her mother-in-law Marci Rasmussen, owner of Especially For You, your downtown florist, create flower arrangements in the Salt Lake City boutique on Tuesday, January 12, 2021. Marci Rasmussen asked for the paycheck protection. Funding for the program during the first round of stimulus last year to keep his business afloat and will also apply to the final round of funding. (Photo: Scott G Winterton, Deseret News)

The program will soon be open to all other lenders on a date to be announced by the Small Business Administration, he said.

This time around, loans will be capped at $ 2 million, down from $ 10 million previously. However, the loans will cover additional expenses not previously authorized by the PPP, such as operations, property damage, supplier and worker protection expenses.

Program eligibility also expands to include 501 (c) (6) nonprofits, housing co-ops, and destination marketing organizations, among other types of entities.

“What that does is really shine a light on the idea that the SBA and the federal government really want to get money to these little organizations, these little businesses,” Morgan said. “They even specifically set money aside for very small institutions – 10 employees or less – and in doing so, open up to small institutions first. It’s really about targeting that money. where they want him to go first. “

“It targets small businesses. These are the ones that are most at risk. As of the spring of last year, these are the types of businesses that have gone out of business,” he said. “What (the SBA) wants is that the companies that still exist are that the funds for their rescue go to these guys first.”

The new PPP gives more flexibility to seasonal employees, according to Ryan Shaw, director of corporate banking at Zions Bank. For new loan seekers, businesses with up to 500 employees are eligible, he added.

Some businesses and freelancers may apply for a second PPP loan. However, to be eligible, these companies must have fewer than 300 employees and show a 25% loss for at least one quarter in 2020.

Marci Rasmussen, owner of Specially For You, your downtown florist, places an order at the Salt Lake City store on Tuesday, January 12, 2021. Rasmussen requested funding from the Paycheck Protection Program in Round 1 of stimulus last year to keep his business afloat and will also apply for the final round of funding.
Marci Rasmussen, owner of Specially For You, your downtown florist, places an order at the Salt Lake City store on Tuesday, January 12, 2021. Rasmussen requested funding from the Paycheck Protection Program in Round 1 of stimulus last year to keep his business afloat and will also apply for the final round of funding. (Photo: Scott G Winterton, Deseret News)

He said applicants will need documents to verify salary costs and lost income, such as tax forms or bank statements.

Additionally, administrators have implemented new rules that will increase the time it takes to receive funds due to stricter policies to prevent fraud.

“They have changed the way we submit, apply and receive our permissions,” Shaw said. “We don’t know the exact timeframe, but we do know that it will take a little longer to get the SBA clearances this time around, and as a result, funding might be a bit slower than it is. ‘was. “

Shaw noted that the last time around some companies received funding within 24 hours, but for this cycle the timeline is likely to be only a few days rather than an extended period.

“In doing so, they have also expanded the use of eligible funds for this cycle. While 60% of the funds still need to be used for payroll in order to receive full forgiveness, they have expanded the other uses,” he said. “(This includes) mortgage interest on the rent, you can now pay for the supplies and equipment your business purchases. You can buy (personal protective equipment) for your employees.”

“You can also pay for any damage to physical property that may have been caused by riots or unrest that may have occurred in your area,” Shaw said. “The main goal is obviously to always have actively employed and paid employees, but they also realize that other expenses were incurred by companies.”

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