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SALT LAKE CITY — As scores of small businesses across the nation struggle to stay afloat, some desperately needed financial help is finally on the way.
Congress late Monday approved the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act — a $325 billion aid package that was part of overall COVID-19 relief spending and is aimed at providing long-awaited additional assistance to the worst-suffering local businesses, not-for-profit organizations and entertainment facilities that continue to struggle to rebound from the effects of the coronavirus pandemic.
"Last time, it was a huge help. I was able to keep my staff on for another month-and-a-half. Unfortunately after that funding ended I had to let most of them go," said Molly Kohrman, owner of Brownies! Brownies! Brownies! in Sugar House, who applied for loans from the Coronavirus Aid, Relief, and Economic Security Act in the fall. "I had seven staff pre-pandemic. I'm now down to two and I'll probably be down to one next month. Additional funding would make a huge difference in whether we're able to stay open for a few more months or if we're going to be closing in a few months.
"I know several businesses in the area in food industries specifically that are either reducing their service — whether that be hours or product line or staffing — they're making big reductions in the next month or so in hopes they will to be able to stay open still," Kohrman said. "But I know a lot of them are just at this point playing it day by day."
She said the pandemic has been so hard on revenues that she worries whether her shop will be able to make it long term.
"If something doesn't change in the very near future, then I am looking at closing permanently," Kohrman said.
For this latest emergency aid package, the act provides a second round of forgivable loans for small businesses made through the Paycheck Protection Program. The plan makes improvements to PPP, funding grants to venues closed by the outbreak along with enacting emergency enhancements to other lending programs from the U.S. Small Business Administration.
"This critical assistance will provide small-business owners with the capital they need to survive the pandemic and includes essential resources for the smallest of our local Utah businesses and nonprofits," said Marla Trollan, director of the U.S. Small Business Administration's Utah district office.
"In response to the new legislation, we are going to stand up our rapid response team again and will directly train them to answer incoming general questions for us and take referrals for the more technical questions and lender inquiries," she said.
Contact information will be provided as soon as the team has formed, she said.
Small business proprietors and nonprofit organizations can subscribe to the Utah SBA office newsletter at www.sba.gov/offices/district/ut/salt-lake-city as well as look for updates on Twitter: @SBA_Utah to keep current on the new programs and any changes they may be implemented in the coming weeks, explained SBA Utah District spokeswoman Siobhan Carlile.
Some of the main points of the new federal relief package include creating a second round of PPP loans for eligible businesses, defining eligibility requirements for the PPP second draw as entities with no more than 300 employees and those that can demonstrate at least a 25% reduction in gross revenues between comparable quarters in 2019 and 2020, a news release stated.
The new plan establishes a maximum loan amount of 2.5 times the business' average monthly payroll costs — up to $2 million. The program also allows small businesses in the accommodation and food services sector to receive PPP second-draw loans equal to 3.5 times their average monthly payroll costs in order to help those businesses mitigate state and local restrictions that have hurt their bottom line.
Borrowers receive full loan forgiveness if they spend at least 60% of their next PPP loan on payroll costs over a time period of their choosing between eight and 24 weeks, the release stated.
The program affirms the eligibility of churches and religious organizations, while prohibiting a future White House administration from designating them as ineligible. The act also preserves the application of affiliation rules to nonprofits, specifically making Planned Parenthood ineligible.
The plan includes specific provisions that support first-time PPP borrowers with 10 or fewer employees, second-time PPP borrowers with 10 or fewer employees, first-time PPP borrowers who have been made newly eligible, as well as second-time returning PPP borrowers. The plan also provides for a set-aside for loans made by community lenders, the release stated.
For more information on the new aid package and its funding programs, visit the SBA Utah district office webpage or call 801-524-3209.