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PPP lending going a lot smoother this time around, Utah banks and grateful businesses say

Shawn Johnson sanitizes bowling shoes after they were used by patrons at All Star Bowling & Entertainment in Draper on Tuesday, Jan. 26, 2021.
Shawn Johnson sanitizes bowling shoes after they were used by patrons at All Star Bowling & Entertainment in Draper on Tuesday, Jan. 26, 2021.
Spenser Heaps, Deseret News

SALT LAKE CITY — This month not only marks the start of a new year, but it also marks what could be a new beginning for hundreds of local businesses impacted they the economic turmoil caused by the global pandemic.

This week, small businesses will begin receiving much-anticipated forgivable loans through the latest round of Paycheck Protection Program approved by Congress. Money that could be the difference between metaphorical “life and death” for some struggling to keep their doors open.

As an example, when the coronavirus outbreak struck last spring, Brad Shepherd — the owner of All Star Bowling & Entertainment — found his livelihood and those of his 300 employees in immediate peril.

“We were forced to close back on March 16. Prior to that, business was obviously horrible with the pandemic and all the media trying to keep everybody from going into public places, attending our types of venues which are entertainment-based restaurants. Finally, they shut us down and that was a blessing because it was so horrible that we were better off closed at that point.”

From there, the situation deteriorated and he was forced to lay off 225 employees as his various locations were shuttered for as many as three straight months. Over time, he’s been able to increase staffing to 150 — still not enough to provide the kind of customer service his patrons had come to expect. Then, to make matters direr, the COVID-19 spread spiked.

“Coming back was pretty awful. Once we opened, it was pretty bad,” he said. “We were pretty optimistic and then, of course, back in June we’d kind of gotten everybody back and operating, then things got even worse.”

Connor Gallimore helps set up Tevahina Tupua, 6, right, and her cousin, Kaleah Sao, 13, to play Hologate, a virtual reality game, at All Star Bowling & Entertainment in Draper on Tuesday, Jan. 26, 2021.
Connor Gallimore helps set up Tevahina Tupua, 6, right, and her cousin, Kaleah Sao, 13, to play Hologate, a virtual reality game, at All Star Bowling & Entertainment in Draper on Tuesday, Jan. 26, 2021.
Spenser Heaps, Deseret News

The increase in infections last spring forced mass closures that heavily impacted the food and entertainment industries. Losing money rapidly, businesses were thrown a lifeline when Congress developed the Paycheck Protection Program aimed at helping small businesses stay afloat.

Shepherd quickly applied and received a six-figure loan that saved his business from closing permanently. Last week, he applied for a second PPP loan to keep the enterprise going. Despite the hardship of the past several months, he maintains a positive attitude that the situation will eventually return to some semblance of normalcy.

“We’re just trying to survive,” he said.

As for-profit enterprises fight to stay alive, the same is the case for organizations that aren’t “in it for the money.”

The Association for Vascular Access is a 501 C (6) nonprofit entity that supports medical professionals in the health care industry, specifically those who are involved in administering care using intravenous methods. Normally, the association, which operates primarily virtually and employs six people, provides information and education to its members electronically as well as through an annual conference where it raises the lion’s share of its operating budget.

Unfortunately, the pandemic prevented organizers from hosting the event in 2020, which has typically been conducted in person, explained Chief Operating Officer Tonya Hutchison.

“We were unable to have a face-to-face conference last year due to the pandemic and because our members are those front-line workers providing care in the hospital facilities, they’ve been unable to travel,” she said.

When the PPP loans were first made available last year, the association wasn’t able to apply because the program was not designated for 501 C (6) nonprofits. However, that requirement was changed for the latest round, giving the association the ability to apply for funding.

“It helps us continue with our mission and our vision in a time where we had a significant decrease in our funds last year,” Hutchison said. “This will allow us to continue to pay for our salaries, and hopefully have a face-to-face conference this year.”

Matt Prejean, left, and Shawn Johnson work in the cafe at All Star Bowling & Entertainment in Draper on Tuesday, Jan. 26, 2021.
Matt Prejean, left, and Shawn Johnson work in the cafe at All Star Bowling & Entertainment in Draper on Tuesday, Jan. 26, 2021.
Spenser Heaps, Deseret News

Having lost over 25% of its annual revenue in 2020, the organization was approved for just under $200,000, which should be enough to keep the operation running for the near term, she said. Without that financial assistance, the group would be in dire straits.

“This helps us continue to pay our staff, and not have to have pay cuts and not have to lay people off,” she said. “We were very fortunate. We had to cut expenditures, obviously, travel, there were no upgrades this year as far as any employee equipment. There were a lot of areas that we just had to cut back not being able to have our annual event.”

While small businesses are grateful for the improvements in the system that will help their enterprises survive, lenders tout the enhanced guidance from the U.S. Small Business Administration with giving them the information needed to process loan applications and distribute funds in a more efficient and timely manner.

“It’s a little bit easier to do at this time because the Small Business Administration (offices) are now a bit more set up to accept the applications, said Roger Christensen, senior vice president of communications, marketing and business development for Ogden-based Bank of Utah. “The system is a lot more refined so I think it should go a lot smoother this time around than it did last time.”

In 2020, Zions Bancorp. processed 47,828 PPP loans, ranking ninth nationally, said Rob Brough, Zions Bank executive vice president of marketing and communications. Approximately 11,000 of those loans were to Utah companies, ranking Zions as the top PPP lender in the state. Since the reopening of the PPP program last week, the company has received more than 20,000 new applications, he said.

“Businesses were more prepared this time around because they’re more familiar with the program and they went through this last year, so they’re better prepared,” he said. “That’s helped make this process smooth this time as well. It’s really on three fronts — from the SBA, from the bank side and also on the borrower side. They were better prepared to enter this application process.”

Scott Anderson, president and CEO of Zions Bank, said the average loan amount his organization distributed during the initial round of funding was approximately $150,000, while this latest round is closer to $100,000.

Connor Gallimore helps set up Kaleah Sao, 13, to play Hologate, a virtual reality game, at All Star Bowling & Entertainment in Draper on Tuesday, Jan. 26, 2021.
Connor Gallimore helps set up Kaleah Sao, 13, to play Hologate, a virtual reality game, at All Star Bowling & Entertainment in Draper on Tuesday, Jan. 26, 2021.
Spenser Heaps, Deseret News

“We did see a lot of applications come in right at the beginning (of the submission period), the flow has (declined) since then, but it’s been steady,” he said. “We actually opened up our online digital application four days before we could actually submit applications to the SBA.”

Because of the added preparation, the bank was able to process loan documents through the local Small Business Administration office as soon as the new funding program was open for applications, he said.

Last year, Utah lenders processed 52,125 PPP loans totaling $5.3 billion, at an average loan amount of $100,766. Among those loans, Wells Fargo made just over 2,000 for a total of $111 million, with an average loan amount of nearly $54,300.

With 89% of the money in those loans for less than $100,000, Wells Fargo small-business manager Brandon Meredith said the funding was able to help hundreds of local small enterprises survive through the worst of the economic turmoil. With this latest round, new rules have been implemented to help them access the financial resources they need to survive the impact of the ongoing pandemic, he said.

“For those businesses that have really been damaged by a pandemic, say for example restaurants, they may be eligible actually for up to 3 1/2 times their monthly payroll, which is different than the first round,” Meredith explained. “So, the SBA has done a nice job in giving guidance to target industries and companies that have really suffered through the pandemic.”

Shawn Johnson, left, talks to general manager Jarred Potter at All Star Bowling & Entertainment in Draper on Tuesday, Jan. 26, 2021.
Shawn Johnson, left, talks to general manager Jarred Potter at All Star Bowling & Entertainment in Draper on Tuesday, Jan. 26, 2021.
Spenser Heaps, Deseret News