Whidbey small businesses stretched thin, seek support
— Created April 22, 2020 by Kathy Reed
By Kacie Jo Voeller
As closures continue and timelines for reopening stores and other services remain uncertain, small businesses in Island County and beyond have turned to federal and state programs for support. Many in the business sector are questioning if the measures will be enough to effectively help small businesses stay afloat in midst of the economic repercussions of COVID-19. Businesses deemed non-essential remain closed or limit operations to help prevent the spread of the virus.
After two weeks of taking applications, the funds from the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), which allowed for $349 billion in loans to small businesses nationwide, were depleted. Other programs, including the Working Washington Small Business Emergency Grant Program, have also closed.
Kelly McPhee, vice president of communications for Banner Bank, an SBA lender, said the bank is continuing to process the PPP applications they received prior to the funds being depleted. She said the bank hopes by continuing the application process up to the point of submitting them to the SBA, that businesses which have already applied would be ready to receive funding, if additional money for the program is approved.
“We are choosing to remain optimistic that congress is going to get the job done, that they are going to finish what they started, they are going to make more funds available, and we stand ready to continue to process and get those applications through the system to get those businesses the money that they are asking for,” she said.
McPhee said Banner Bank has 5,400 applications in process already, with several thousand already completed. In comparison, she said in 2019 Banner Bank completed 250 SBA loans. In order to accommodate the influx of applications, she said the company grew its SBA team from 13 to 184 employees to best serve client needs.
“We cannot control if additional funding is going to be made available but what we can control is how much we stretch to assist those that have come to us for help.”
McPhee said they are hoping to find additional ways to assist clients, and through the number of programs available at the local, state and national level, the company remains hopeful businesses will make it to the other side of the closures. McPhee said there are other resources available, including the Save Small Business Fund through the U.S. Chamber of Commerce Foundation. The fund provides $5,000 grants to qualifying businesses in impacted areas, including Oak Harbor, Coupeville, Freeland, and Langley in Island County (www.savesmallbusiness.com).
“When we look at all of these collectively, all of these different forms of assistance, if we are all helping to lean into our area businesses, the hope is that the outcome will be that we are all better because of it,” she said. “We all leaned in, we all helped where we could, with the idea that collectively we are going to come up and out of this.”
Matt Ray, market president of Heritage Bank, said the institution allocated many resources to supporting clients as they sought funds through the PPP.
“For those able to secure funding, it will undoubtedly be helpful to the majority of those clients,” he said. “I will simply state that I know there are businesses that were not able to get funding in the initial $349 billion for a variety of reasons. There is a need for additional funding.”
Ray said another key piece of the program is meeting the criteria for loan forgiveness.
“In addition, the forgiveness aspect of the program is critical,” he said. “While we have the basic framework for the forgiveness, we await additional guidance from the SBA on how this will be implemented and executed.”
Darrell Bratt, co-owner of the Blue Fox Drive-In Theater, said he worries the programs may not be sufficient to help small businesses as quickly or at the scope needed.
“I think my main concern is I know what this is intended to do, it is to keep people off unemployment, keep the unemployment rate down, but it really does not help small businesses too much,” he said.
Bratt said the PPP, while it will help businesses with payroll, especially as employees begin to return to work, does not allow for adequate coverage of many other expenses businesses routinely face. Bratt said he feels allowing businesses to reopen, with social distancing and other guidelines in place, would be the most helpful.
“It (the loan) does not do any good as far as I understand, for my business insurance, or equipment payments or anything else that comes up to help a small business stay afloat,” he said.
Eric Marshall, publisher of Whidbey Weekly, said loan programs are vital to small business owners as challenges from closures persist.
“Resources like the PPP and the Economic Injury Disaster Loan are the only options for many business owners,” he said. “The mandated closing of businesses and cancellation of events, while necessary to control the virus infection rate, has left many businesses without the ability to make any money. Even with the opportunity for sole proprietors to receive unemployment, it will not be enough for people to cover all their business and personal expenses.”
Many Island County business owners who applied prior to the depletion of funds have yet to hear the status of the loan, and others were not able to apply in time, Marshall said.
“I’m afraid it is going to lead to business closures,” he said. “Even those who submitted their applications prior to the depletion of funds are still waiting on approval of their applications and funding of their loan.”
Marshall said community support is another key element in keeping businesses afloat.
“I personally appreciate the support our business has received from the community and I’m sure other business owners feel the same,” he said. “We live on an awesome island where we try to help one another. I encourage my fellow business owners to hang in there as long as they can. Reach out to the EDC (Island County Economic Development Council) or the local chambers of commerce for resources, ideas and support. We are all in this together.”
Marshall said both small business owners and Island County citizens can advocate for the allocation of more funding for small businesses.
“Business owners and the public can help by calling or writing our state leaders and encouraging them to provide additional revenue to the Working Washington Small Business Emergency Grants,” he said. “Our national leaders need to be sent the same message in regard to putting additional funds into the CARES Act.”
Rep. Rick Larsen, who represents the Second Congressional District of Washington state, said he wants to help small businesses acquire the funding they need.
“I support more funding for small businesses, and I continue to hear from workers and business owners about the need to put more money into PPP,” he said. “I encourage small business owners to share their story of how COVID-19 affects their business and their experience with accessing federal benefits at https://larsen.house.gov/forms/form/?ID=7.”
Larsen said there is a large demand for small business relief in Washington state and throughout the nation, and the House of Representatives has been working to strengthen the PPP and EIDL programs.
“COVID-19 and the necessary public health precautions have hit Northwest Washington’s small businesses and workers especially hard,” he said. “I will continue to work with local officials and Washington state’s congressional delegation to fight for critical COVID-19 relief.”