Shelley Sullivan can’t say with certainty what would have happened to her 26 employees if it weren’t for the Paycheck Protection Program, but she’s pretty sure it wouldn’t have been anything good.
Sullivan, president of Energy Sciences, an energy consultant firm based in Berkley, Mich., said her company took advantage of the PPP, part of the CARES Act signed into law in March, because – like many businesses – she had stop-work orders and stalled contracts to contend with.
As a result of the PPP, Energy Sciences was able to keep all 26 employees on the payroll, rather than facing the alternative.
“It’s hard to say … in all likelihood, we would have reduced some staffing and compensation,” Sullivan said. “It would have constrained us, and we would definitely have had a different strategy (without the PPP). If that money hadn’t been there … it’s hard to say.”
Energy Sciences has a lot of company. According to statistics released by the U.S. Small Business Administration, some 4.9 million PPP loans had been approved nationally as of June 30.
Of those, more than 726,000 have gone to small businesses in the SBA’s Great Lakes region, which covers Minnesota, Michigan, Indiana, Illinois, Ohio and Wisconsin. Those businesses received more than $87 billion in PPP funds.
And, with some $131 billion still remaining in the fund, Great Lakes Regional Administrator Rob Scott said the SBA started accepting applications again on Monday, with a new deadline of Aug. 8 that was established in the recent PPP Extension Act.
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“While the pandemic has greatly impacted our economy, in the true spirit of entrepreneurship, small businesses have shown they are resilient and stronger,” Scott said. “With the Paycheck Protection Program Extension Act, they now have an additional month to apply for and benefit from this forgivable loan program, giving them the financial relief they need to weather the pandemic and their employees some additional peace of mind that they will continue to get paid.”
The SBA and the U.S. Treasury Department this week disclosed loan-level data, including business names, addresses, ZIP codes, business type, demographic data, nonprofit information, name of lender, jobs supported and loan amounts from $150,000 to $10 million.
The $150,000 and above categories account for nearly 75% of the loan dollars approved.
When Great Lakes SBA officials were asked why the list of businesses was released, they pointed to a statement made in May by U.S. Treasury Secretary Steven Mnuchin.
“We are striking the appropriate balance of providing public transparency, while protecting the payroll and personal income information of small businesses, sole proprietors, and independent contractors,” Mnuchin said.
U.S. Small Business Administration Administrator Jovita Carranza said the department values “transparency and our fiduciary responsibility” to make sure taxpayer funds are used appropriately.
“This responsibility goes together with the steps we are now taking to provide needed public information in step with protecting entrepreneurs’ personally identifiable information associated with their business loan,” Carranza said. “Small businesses are the driving force of our economic stability and are leading the way to allow our nation to rebound safely.”
Steve Lowisz, founder and CEO of Qualigence International, a talent research and recruitment firm offering sourcing, recruiting, recruitment research and project outsourcing, said his company received a $683,000 PPP loan he says likely saved 6-8 jobs
Just before the company received the loan, members of its executive team, including Lowisz, took a 25-percent pay cut, and the rest of the team reduced salaries by 20%.
“Had we not received the dollars, we would have dug a little deeper and probably laid off 6-8 people for a period of time,” Lowisz said. “It would have affected us and all of those individuals pretty significantly.”
While there was some grumbling about the release of the names of companies getting the loans, Lowisz said he has “no problem” with the disclosure.
“A lot of companies got value out of the PPP, and I think we should be proud of that,” Lowisz said. “We took all the team back to 100% pay, and we were able to actually bring on a couple of new people. As long as you did the right thing with the money, (disclosure) was fine.”
Scott said the SBA believes the PPP protected some 81% to 90% of estimated small business payroll. Loans by state in the region:
- Illinois had more than 202,000 loans approved, for some $22.5 billion.
- Ohio had more than 140,000 loans approved, for some $18.4 billion.
- Michigan had more than 121,000 loans approved, for some $16 billion.
- Wisconsin had more than 85,000 loans approved, for some $9.9 billion,
- Indiana had more than 79,000 loans approved, for some $9.5 billion.
The number of businesses taking the loans doesn’t surprise Ursula Scroggs, managing director at DKSS CPAs + Advisors in Troy, Mich. Scroggs said she has a number of clients in a variety of industries who needed the PPP to sustain their operations.
“Small businesses absolutely needed this money,” Scroggs said. “Without a doubt, I have clients who would have struggled without this PPP program. A lot of them may not have been able to survive without it.”
With some $131 billion left, another month to apply and no way of knowing what’s coming down the road in terms of the pandemic Sullivan, the Energy Sciences president, said the program could help businesses into the future.
“There’s ongoing uncertainty, because we’re not out of the woods yet,” Sullivan said. “Not only did it help with the immediate need, but there’s an uncertainty into next year in developing the work that we do. It was very much a relief.”