TRAVERSE CITY — Data released this week shows the federal Paycheck Protection Program has pumped more than $275 million into the five-county Grand Traverse region.
In Traverse City alone, 1,957 businesses, nonprofits and self-employed people received PPP loans totaling more than $171 million.
Bill Marsh Automotive Group took out a $3 million loan, making it possible for all 315 of the company’s employees to get regular paychecks during the shutdown — even those who weren’t working.
The company shut down in mid-March after the governor’s executive order and remained closed for about two months, with only the body shop and service department partially open.
Bill Marsh, who with his brothers owns the company, said before the paycheck program was put into place they had decided to continue paying their employees, thinking it would only be for a couple of weeks.
“We made a commitment to all of our employees that we would pay them at their current rate,” Marsh said. “We wanted to spare them the stress and hassle of applying for unemployment.”
When the state shutdown was extended and the company was bleeding revenue it became clear that they would have to start furloughing people, he said.
“When the PPP program came out we jumped at it,” Marsh said. “There’s not a single person who has had to apply for unemployment from day 1. That’s where the PPP really helped us.”
At the other end of the spectrum, two loans were made in the ‘private households’ category for $700 and for $922 in Traverse City. The money was used to pay workers for activities related to the operation of the household.
Data released by the SBA for loans of more than $150,000 includes company names and the number of jobs preserved by each loan. Data on smaller loans includes only the amount borrowed and broad information about what type of business took the payment.
The PPP loan, funded by the federal CARES Act, allows small businesses — those with fewer than 500 employees — to keep their workers earning a paycheck, according to the U.S. Small Business Administration. The act had originally designated $349 billion for the program, but when the funds were exhausted within 13 days another $310 billion was added to the pot. Businesses can apply for the loans until Aug. 8.
Employers can use the money for payroll, mortgage interest, rent and utilities and it does not have to be paid back if at least 60 percent of the money is used for payroll. If an employer reduces the number of employees or cuts wages, some of the loan will have to be paid back, according to the SBA. Marsh said he hopes his company’s loan will be forgiven, but he’s not counting on it, especially in light of all the political dialogue over the program.
“It’s out of our control, but we’re cautiously optimistic,” Marsh said.
Scott Newman-Bale, CEO of Shorts Brewery in Antrim County, said he thinks the loan was designed so that no one would have to pay it back. Shorts borrowed $1.185 million and is confident the entire amount will be forgiven. The company’s 185 employees were laid off when the state closed its bars and restaurants, with the understanding they would still have jobs when things reopened, Newman-Bale said. Most were brought back early when the business received its PPP loan and was able to pay them, though some chose not to come back, he said.
Others were scared to come back right away.
“But now everyone’s back and we hired a bunch more people, too,” Newman-Bale said.
The company, which includes a tasting room in Bellaire and a production facility and pop-up summer beer garden in Elk Rapids, used the entire loan for payroll, he said.
Newman-Bale said he likes to think Shorts would have survived the shutdown without the PPP loan, but says the company would have had to lay everyone off, suspend construction on a storage building and cut back on charitable spending.
The brewery lost about 98 percent of business during the first few weeks of the shutdown, but now is down about 10 percent.
“We’re having a pretty decent year,” Newman-Bale said. “We’re rebounding with a strong June and July so far.”
At the Grand Traverse Regional Land Conservancy all 28 employees continued to work — some in the field and some at their homes — because of a PPP loan of about $400,000, said Jennifer Jay, director of communications.
Spring is a critical time of year when land preserves are put in order, trails are cleared of their winter debris and invasive species are rooted out, Jay said. The work is usually done with the help of about 300 volunteers.
“Under the executive order we couldn’t utilize any volunteer workers,” Jay said. “And at a time when we’re seeing record users on our trails.”
The conservancy has a service area the size of Delaware, she said.
“So with a staff of 28 and no volunteers ... whew.”
Jay said she is grateful the nonprofit was able to get the loan and retain employees.
“Without that loan I don’t know what would have happened,” she said.
Loans are made by local lenders and are guaranteed by the SBA, which gives all loans final approval. The recently-released PPP data includes all loans approved by banks and other lending institutions, but does not exclude those the SBA has said are ineligible.
Loans of more than $2 million are audited by the SBA; borrowers who receive less will be deemed to have made the request in good faith, according to loan guidelines.
In Cedar, 43 businesses took out loans ranging from $2,822 to $146,000. Corey Flaska, owner of Leelanau Construction, borrowed $83,000. He expects to have the entire amount forgiven.
Flaska said he applied as soon as the loans became available and when construction companies had to stop working March 24, his 10 employees were sent home and paid their wages instead of having to go on unemployment. Construction resumed in early May and the crew came back raring to go, he said.
“It helped my employees a lot,” he said. “I’ve heard horror stories that it takes up to eight weeks to get unemployment. My team didn’t even have to try.”
For his company, which is now back in full swing, the loan worked exactly as it was designed to work, he said.