Since kicking off last spring, the Small Business Administration’s forgivable Paycheck Protection Program loans have provided a lifeline for numerous businesses, contractors, sole proprietors and nonprofits in the Wood River Valley.
Millions of dollars in PPP funding were doled out to Blaine County residents since early last summer, and some of those loans have recently been “forgiven,” essentially making the loans a grant. Yet some businesses are hesitant about taking out a second PPP loan now.
“It took a lot of the stress off,” said Jerry Hadam, a 58-year-old single parent of two who owns the Saddletree frame shop and art gallery in Ketchum. He closed his doors for five weeks during the coronavirus lockdown and opened back up in May.
Hadam said a modest PPP loan from First Interstate Bank allowed him to pay a part time employee and himself immediately after reopening. Since then the loan has been forgiven and business has picked up. Thanks to an additional, and larger, business grant from the state, Hadam was able to purchase new equipment and bring some new art into his store. As a result, he has no plans to apply for round two of PPP.
“I am not sure I would even qualify,” Hadam said. “Last year’s business has now compared well on average to several other years.”
On Jan. 11, the federal government’s PPP loan program was reopened with up to $284 billion in funding from Congress. Most second-time borrowers will be allowed to take a maximum loan amount of 2.5 times their average monthly 2019 or 2020 payroll costs.
Under new PPP regulations, accommodation and food service businesses hit hard by the pandemic can borrow up to 3.5 times their average monthly payroll costs for 2019 or 2020.
While the first PPP round distributed loans with little or no documentation, new regulations require that a borrower show a 25 percent reduction in income during at least one quarter of 2020, through Dec. 31.
Despo’s Mexican Food Restaurant owner Amy Harris said she has not yet applied for PPP forgiveness for her first PPP round loan from Idaho First Bank, but plans to apply anyway for a second round.
“It absolutely helped me keep employees,” Harris said.
For the full story, see the Friday edition of the Mountain Express.