Nearly 8,000 businesses in Marin have secured virus relief loans
Nearly 8,000 businesses and nonprofits in Marin County have borrowed money under the federal paycheck protection program, according to The data released this week by the Small Business Administration.
The program was created by Congress in April to help small businesses weather the economic storm caused by the coronavirus pandemic.
In Marin, over 85% of borrowers obtained small loans of less than $ 150,000. The SBA has only released the names of companies that have obtained large loans of $ 150,000 or more, and provided only a range for the loan amount given to each company.
The largest loans, between $ 5 million and $ 10 million, went to nine companies in Le Marin. They included Il Fornaio restaurant chain based in Corte Madera, professional services company Nes America in Tiburon, and concierge services company Township Building Services in Novato.
Three nonprofits were also approved for the largest loans, including the San Rafael Bay Area Community Resources Social Service Organization, the EAH Real Estate Organization, also in San Rafael, and the Health Care Organization. health Larkspur Hospice by the Bay.
Three construction companies were among the major loan recipients, including W. Bradley Electric in Novato, Ghilotti Bros., Inc. in San Rafael and the Dutra Group, which owns the San Rafael rock quarry.
Aimi Dutra, spokesperson for Dutra Group, said the company laid off around 20% of its roughly 300 employees in March, but hired them all in April when the loan was approved.
“Not knowing what the future had in store for us, we had to go back and lay people off,” she said. “So when the P3 program came along, it was a mechanism that allowed us to get people back to work and fulfill the contracts that eventually came back online. “
In the small loan category, professional and technical service firms borrowed most of the money from Marin – about 19% of the total, according to a Marin Economic Forum analysis of SBA data. Health care and social assistance companies borrowed 12% of the money, construction companies borrowed 11%, accommodation and food companies borrowed 7%, and retail businesses borrowed 7% as well. %.
Although professional services and health care companies borrowed more than other sectors, unemployment data shows that job losses in these sectors were relatively small, said Robert Eyler, chief economist at Marin. Economic Forum. Job losses were much higher in hotels, restaurants, barber shops and nail salons, which borrowed a much smaller share of the money, he said.
“You may have seen more sophisticated companies looking for money because it provided them with a bridge over murky waters. But at the end of the day, maybe they didn’t have so many problems, ”Eyler said.
“The question is, without PPP, how much worse would it have been for restaurants and hotels, and will it matter anyway? The companies had the money, but will they still survive, even with the bridge, as this situation begins to lengthen? “
A total of 6,739 businesses in Marin County were approved by lenders for small loans and 1,081 were approved for large loans. About 100 county businesses and nonprofits have borrowed $ 1 million or more.
The PPP Initiative Has Distributed $ 521 Billion To Nearly 5 Million Businesses And Organizations In The United States
Economists generally attribute to the program helping to prevent the labor market collapse from being much worse. Employers created 7.5 million jobs in May and June, but the economy still found itself with almost 15 million fewer jobs than before the pandemic. The PPP probably generated part of this gain.
But the program was only meant to support the economy during a short hiatus from the coronavirus pandemic, which now threatens to have a longer-term impact. The US Treasury Department initially required loans to be spent within eight weeks of receipt, but this was later extended to 24 weeks.
Many small businesses have already used up their PPP money and still face significantly lower demand as consumers remain reluctant to revert to their old habits of shopping, going to gyms, or dining out.
“The biggest problem is that PPP is short-term help,” said Adam Ozimek, chief economist at Upwork, a freelance work platform. “And now we are dealing with a medium and long term problem. “
A survey by the National Federation of Independent Businesses found that in mid-June, 14% of small businesses that borrowed from PPP expected to have to lay off some workers when their loans were exhausted.
The program has provided loans of up to $ 10 million to small businesses to help them recover from government-ordered shutdowns and lost revenue caused by the virus outbreak. The average loan amount for the entire program was $ 107,000, the Treasury Department said in a general summary of the program.
Loans can be canceled if the companies primarily use the money to continue paying their workers. The program was originally scheduled to expire on June 30, but was extended last week to August 8, with $ 132 billion still available.
The Associated Press contributed to this report.