SALT LAKE CITY — Thousands of Utah small businesses have reaped some potentially “lifesaving” benefits from federal monies made available to them in the wake of the coronavirus outbreak.
This week, U.S. Small Business Administrator Jovita Carranza came to Utah to meet with local enterprises that have been the beneficiaries of an estimated $5.2 billion that was doled out to over 52,000 Utah small businesses. She has been traveling the country recently visiting recipients of SBA funding aimed at helping small businesses keep workers on their payroll.
In March, Congress approved the bipartisan Coronavirus Aid, Relief, and Economic Security Act that established the Paycheck Protection Program — created to provide economic relief for small businesses and nonprofits affected by the COVID-19 pandemic. As of Aug. 8, the program had approved more than 5.25 million loans nationwide, including 52,275 in Utah.
“I wanted to learn how they were sustaining their businesses, how they were applying those funds, where they were successful in retaining their employees, as well as retaining the wages,” she said after touring FireFly Automatix — a Salt Lake City-based firm that engineers and manufactures large turf harvesters designed to reduce labor and increase productivity for turf farmers.
“Visiting them, engaging with them and the lenders that actually provided the disbursement of the funds was really my focus here.”
She said FireFly is an example of companies that validate exactly what the Paycheck Protection Program was supposed to achieve — to retain its employees.
“When we look at companies such as this one, we don’t think of them as a loan transaction. We think of them as a contributor to the local economy and the stability of the United States,” Carranza said. “The fact that over 100 employees were able to be retained in this company and the fact that this company also provides skills training. They hire from the local high schools and provide on-the-job training, then (the workers) become skilled machinists or welders. Those are the type of employers the American dream is all about. That stabilizes the economy and strengthens the security of any nation.”
Just a few months ago, FireFly was among the many companies around the state looking at potential disaster when the pandemic struck, putting a major dent in the fledgling company’s revenue stream, explained Matt Aposhian, president and chief operating officer.
“(CEO) Andrew (Limpert) and I were walking the floor every day just crying, just trying to figure out (what to do),” he said. “We can’t let these people go. We’ve got to figure something out to keep everybody going.”
They applied once for PPP funding and were rejected initially, but were successful on their second attempt, Limpert said.
”Having this PPP come in was just a huge impact to us. It gave us the stability to actually go out and innovate and to just charge forward with our plans,” Aposhian said. “It gave us that confidence and hope to be able to do that.”
The funding has allowed the company of 153 employees to make it through the worst of the recent economic downturn, he added,
“We’re pretty well-capitalized, but when you’re not selling, we would had to have had a massive layoff — probably half of our crew,” he said. “And it would have taken months, if not years, to recover the momentum we had from the beginning of the year. So in this way, this program was particularly important to us.”
Local officials tout the first two rounds of CARES Act funding as generally successful, primarily citing the thousands of companies that have been saved from potential financial ruin.
“I really believe that the (PPP) program has worked very well, and in reaching out across the state and talking to business owners, almost all of them have said they would apply for another PPP if it were offered,” said Marla Trollan, director for the U.S. SBA Utah District Office. “Overall, all these small businesses that have received a PPP loan have been very, very grateful and it’s been able to keep them afloat.”
She added that Congress has been at the bargaining table trying to come up with a new round of funding for individuals and businesses, which could offer more relief in the months ahead if an agreement can be reached sooner rather than later. When that funding may become available is still uncertain, she noted, but SBA is optimistic a deal can be struck.
Until then, she encourages small businesses in need of financial support to consider applying for other funding options.
“It’s really important for people to know that they can still apply for an Economic Injury Disaster Loan through the SBA. That’s a 30-year loan at 1% (interest). So it’s still out there for them to take advantage of,” Trollan said. “It’s just educating small business owners that there are funding options out there for them.”