Paycheck Protection Program funding starting to roll out |

Paycheck Protection Program funding starting to roll out

First draw borrowers can start making loans Monday and second draw will begin Wednesday, if the loan originates from a community financial institution.

STEAMBOAT SPRINGS — Money from the Paycheck Protection Program could soon be flowing back into the Yampa Valley after the Small Business Administration released guidance Friday about how this round of the federal funding will roll out.

Loans to businesses can start being made as early as Monday but are limited to lenders deemed a community financial institution, of which Colorado has just four. Other lenders will be able to start making loans “shortly thereafter,” according to guidance from the SBA, but exactly how long that will be is unclear.

The $284 billion in funding made available for the forgivable loan program meant to keep employees on payroll is part of COVID-19 relief package passed by Congress last month. The $900 billion law also includes additional unemployment benefits. It extends an eviction moratorium and provides direct payments to Americans, many of which have already gone out.

Randy Rudasics, manager at the Yampa Valley Entrepreneurship Center, said there are some local businesses at the “edge of their rope” after having a decent summer. He said he hoped county grants given out to businesses as well as more PPP loans would help struggling businesses through the next few months.

“This may help, in my opinion, get them through winter and early spring, which hopefully will result in a safer environment for all of us in the latter part of spring,” Rudasics said. “It is putting one support mechanism on top of another, on top of another, trying to push people’s ability to survive another month or two at a time.”

Businesses that had not previously received a PPP loan can start making first draw loans Monday, if those loans come from a community financial institution.

“Perhaps they had enough reserves, and they didn’t want to borrow, take out a loan or complete the paperwork for whatever reason,” Rudasics said.

If it received a loan previously, a business could begin applying for a loan Wednesday if it’s from one of the approved lenders. John Bristol, economic development director at the Steamboat Springs Chamber said these lenders are being prioritized to ensure that minority-, veteran- and women-owned businesses would have a chance to access the money.

“They saw that minority-owned, veteran-owned and certain businesses were not necessarily applying at a quick pace,” Bristol said. “I think this was an effort to target funds toward those businesses.”

The application for the loans will be open until the end of March, and there is a significant amount of funding, Bristol added.

Rudasics pointed out all the community financial institutions are not-for-profit, and they have a community service element in their mission. As to what “shortly thereafter” means, Rudasics imagined there would not be much delay before other financial institutions draw up the loans.

“I don’t think the goal here was to limit people’s ability to get this PPP money,” Rudasics said. “It is just to give these community-oriented financial institutions a brief advantage.”

Borrowers will be able to choose how much time they want their loan to cover between eight and 24 weeks. Loan money also can be used to cover additional expenditures like personal protective equipment for workers as well as operations and supplier costs.

The program expanded to include operations that do not typically make a profit like housing cooperatives, direct marketing and tourism-focused organizations and local chambers of commerce. It will also include seasonal employees this time around, which Rudasics said is meaningful for a resort town like Steamboat.

To be eligible for a second draw of PPP loans, businesses need to have 300 employees or fewer and be able to demonstrate at least a 25% drop in gross receipts. If a business did not previously apply for a loan, it would be eligible for a first draw loan.

While local banks are not yet able to make the loans, both Rudasics and Bristol recommended that businesses get paperwork and other materials needed to secure the loans in order now.

Though the most recent relief package just passed last month, there is already talk of what a potential future package could look like. Rudasics said if there was more relief, he would want to see support for state and local governments, child care facilities and additional small business support, particularly for very small businesses and gig-economy workers.

Bristol said another package needs to be really data driven to ensure relief dollars are well targeted.

“I think that just wide disbursement of funding that is not targeted doesn’t make a lot of sense,” Bristol said. “We know that a lot of industry sectors are doing pretty good.”

Bristol said public administration should be thought about as a business sector that needs support. Decreases in spending across the country has often left local governments needing to make tough cuts. Staff cuts or putting off capital projects can have a large effect on businesses throughout the county, Bristol said.

“It is a question of trying to be data driven on this and trying to understand the needs,” Bristol said. “Each state is a different financial situation, same with municipalities and counties.”

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