$600M in loans approved for Alaska small businesses as many wait for relief
The Small Business Administration says roughly $600 million dollars in loans have been approved to be paid to 2,703 small businesses across Alaska, to help curb the economic impacts of COVID-19.
The loans are part of the Paycheck Protection Program (PPP) from the $2.2 trillion federal CARES Act. The PPP can loan up to $10 million and is for businesses with up to 500 employees. The entirety of the loan can be forgiven if it is spent in areas like payroll.
For many small businesses, the financial help will give welcome relief, once they get it.
Kelly Malidore owns True Colors Painting, a house painting business based out of Big Lake with her husband Nick. Until it warms up a little more, they can only paint interiors. With houses full of people and the need for safe social distancing, painting inside is often impossible.
“We’re squeaking by,” said Malidore, who described that work has slowed to around half of what they were doing before the pandemic began.
Malidore has applied for federal help, making a $8,800 PPP loan request. Her application has been approved and she is waiting to receive the money.
The loan would help True Colors continue to make payroll. “Every penny needs to be pinched,” Malidore said.
Other small businesses in Alaska have made big adjustments to how they operate in order to survive.
Gyms were among the first businesses mandated to shutter their doors when “hunker down” orders were made last month.
“We got about 12 hours notice,” said Derek Ford, a co-owner of Running Wild Fitness in Anchorage. The gym quickly moved to giving fitness classes online or outside at a safe distance.
Ford says he has applied for a $20-$30,000 PPP loan alongside an Emergency Injury Disaster Loan (EIDL), which can be up to $10,000.
The concern for Running Wild Fitness is how long social distancing rules last and what growing unemployment figures means for the gym’s membership numbers.
Both business owners say they are in a “holding pattern,” having made their PPP loan applications but not having received the money.
The thousands of applications across Alaska have created a backlog at banks. The loans need to be paid out initially by banks and some of Alaska’s biggest local lenders have struggled to keep up.
Northrim Bank and First National Bank Alaska have both temporarily suspended giving out PPP loans, citing an enormous volume of applications.
Kate Bender, the community & Public Relations Manager at Northrim Bank, said the bank is not disclosing how many loans have been made or the total dollar amount of those loans.
“We have had an extraordinary response to the PPP. Since the rollout 10 days ago, we have streamlined our process and are currently working through all the applications that we have,” Bender wrote by email. “We do not have a date that we will be able to take more applications, but will keep our website updated with any information as it becomes available.”
Jon Bittner, the executive director of the Alaska Small Business Development Center, doesn’t seem surprised that local lenders are struggling with a backlog. “The real problem with the rollout is that no one anticipated basically every small business in the nation needing assistance at the same time,” he said.
Bittner says he is hearing frustration from small business owners and his organization is there to help give advice. “This is kind of what we were created for,” he said.
Bittner notes setting up the PPP has been done at breakneck speed and is there to cover short-term needs for small businesses. More financial relief for longer-term challenges could be coming for small businesses as part of future federal relief packages.
Evan Wood, the co-owner of Devil’s Club Brewing in Juneau, says his business is “limping along,” relying solely on to-go orders while on-premise service is prohibited.
Devil’s Club Brewing has applied for all the federal loans it can and a small business loan from the City and Borough of Juneau that pays a maximum of $50,000 per eligible business.
Wood says the brewery wants the loans to keep paying its 14 employees on reduced hours so they can afford rent and food. Some have applied for unemployment benefits but none have got them yet.
Devil’s Club Brewing is exploring if it would be better to lay off its staff or to wait for the loans to come through and keep paying them. Balancing the well-being of the employees against the well-being of the business is tough. “It’s a very sticky situation for sure,” Wood said.