The Olympic Peninsula Humane Society in Port Angeles and Finnriver Farm & Cidery in Chimacum are among applicants hoping to benefit from the $484 billion COVID-19 economic stimulus bill signed Friday morning by President Donald Trump.
Luanne Hinkle, executive director of the nonprofit humane society in Port Angeles, and Eric Jorgensen, co-owner of Finnriver, a private business in Chimacum, said Friday afternoon their applications for funding are already with their banks and ready to be submitted this week.
But they may be among the lucky ones seeking respite from the business slowdown caused by efforts to stem the virus.
Both Colleen McAleer, Clallam County Economic Development Council executive director, and Brian Kuh, EDC Team Jefferson executive director, said they expect the $310 billion Paycheck Protection Program, which contains a key forgiveness component, to be used up by this coming Friday.
“I think it will be gone in just a matter of days,” McAleer said.
“There have been reports saying there needs to be $1 trillion.”
The $484 billion Paycheck Protection Program and Health Care Enhancement Act provides more funding for COVID-19 testing, includes money for health care providers and fuels the loan program for businesses.
Hinkle and Jorgensen missed out on an earlier $349 million loan program, they said, an effort that McAleer and Kuh said was plagued by problems.
The loans in the latest lending effort includes $60 billion managed by smaller lending institutions and community banks more amenable to lending to smaller businesses.
The PPP loan is paid back at 1 percent interest over two years unless lenders meet the forgiveness requirement in full.
Loan payments are deferred for one year.
It is completely forgiven if 75 percent goes into payroll. Any amount under 75 percent must be paid back.
The remaining 25 percent is forgiven if it goes to other operational expenses, McAleer said.
If employees’ hours are reduced, the loan is still forgiven.
Banks do not have to participate in the loan program, McAleer said.
“The question is, are they going to do it,” she said, pointing entrepreneurs to www.choose clallamfirst.com for information and access to business advisors.
McAleer also urged business owners in both counties to visit the websites of North Olympic Peninsula banks for further help.
“It’s a huge amount of work and not very much interest and they are doing it for the benefit of their business customers,” she said.
In addition, a business owner without a financial relationship with a lending institution may have harder time of it.
“It’s much more difficult for a bank to process a loan and do their due diligence on a customer if they do not have a business account with them,” McAleer said.
The earlier loan program’s problems included bigger businesses snatching up large sums of loan money to the detriment of smaller entrepreneurs, and banks being ill-prepared to process loans, Kuh and McAleer said.
“Since it closed previously, and they ran out of money, banks were still working and accepting loan applications in preparation for the money to be reauthorized,” McAleer added.
For information on resources for Jefferson County business owners, go to the EDC Team Jefferson website at www.tinyurl.com/PDN-JeffersonCovid.
Kuh had his doubts about the effectiveness of the second COVID-19-relief package, calling the first effort “a debacle” for small businesses unable to get the help they needed.
Kuh said he did not see many guideposts to prevent large banks with larger clients grabbing the majority of funding in the newest effort.
“That subset for community banks will certainly help,” he conceded.
“The immediate benefit is it’s salve on an open wound, in terms of an economic wound.
“I do have concerns bout how fine-tuned it is.”
In the first go-round of funding, Jorgensen contacted multiple banks to submit an application for funding, but the bank could not get his application in fast enough before the funding was gone.
Banks were scrambling, Jorgensen said, adding his bank learned the rules of the program at midnight the day before the Paycheck Protection Program went into effect.
“They contacted me last week and said, let’s get all our ducks in a row,” Jorgensen said.
“I’m pretty sure they’ll be able to hit send Monday.
“They had a little more time to prepare.”
Jorgensen is applying for $350,000 for payroll costs.
“If I get this loan, I’ll be in the awkward position of putting a bunch of employees back on the payroll, even though we’re not open for business,” Jorgensen said.
“What really is going to be a complicated, messy process is applying for forgiveness for the loan, which is what everyone is going to be doing.
“That’s where I’ll be thankful talking to a local banker who I’ve known for 10 years instead of some guy in California who I never met.”
Hinkle said she went to four banks before she obtained a loan package for the program to cover more than $100,000 in payroll for 2½ months.
“It’s ready to go,” she said Friday.
“We do have emergency funds put away, but we also usually have our largest fundraiser this month that brings in $200,000 for us,” Hinkle said.
The Meowgaritas and Mutts effort will have to go by the wayside this year.
“That’s a cash flow challenge,” Hinkle said.
It’s unclear when businesses will get back to normal.
Jefferson County Health Officer Dr. Tom Locke said projections show that businesses may start to be able to slowly reopen by about May 18.
“What we are trying to do is to get the level of infection down low enough in the community that loosening up or backing off on mitigation will not create a situation where there is an exponential rise in infections,” Locke said.
“It’s going to be necessary to get this thing low enough that if transmission starts to increase, it won’t have this disastrous effect and overwhelm the health system.”
Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 55650, or at pgottlieb@ peninsuladailynews.com.