PPP lends ‘lifeline’ as Tri-Cities struggles to put phase 1 behind
As business and civic leaders in Tri-City work to bring local Covid-19 infection rates under control so more businesses can open, some of Mid-Columbia’s largest employers say grant paycheck loans were a “lifeline” that helped them retain valuable employees.
Benton and Franklin counties switched to a modified version of Phase 1 of Washington’s Safe Start economic stimulus program in early July, just as the US Small Business Administration released the names of the millions of American companies that have received Paycheck Protection Program (PPP) loans through the federal Coronavirus Aid, Relief, and Economic Security Act, or CARES.
The economic recovery and the millions of dollars in PPP loans that have poured into the Tri-Cities are linked. For businesses to revive, they must be in business. Employers who have received P3 loans say that is exactly what happened.
“Having this support from the government has been a relief. It reduced stress, ”said Chris Senske, owner of Senske Lawn & Tree Care Inc., a Kennewick-based landscaping company with branches in Washington, Idaho and Utah.
Senske received between $ 2 million and $ 5 million – the SBA gives ranges rather than exact amounts. It was one of more than 500 Tri-Cities companies that received $ 150,000 or more. 2,200 others received up to $ 150,000.
Senske said the company used around 83% of its PPP loan for salaries and the balance for other authorized expenses such as rent. The money helped him manage his growing accounts receivable balance as customers lowered their bills and the company stopped sending reminders.
“We had a lot of employees who were potentially at risk for their jobs,” he said.
It used the PPP money to keep all of its 472 employees, including bringing back people made redundant at the start of the pandemic. He plans to ask for the loan to be canceled.
Tri-City’s economy is far from being restored.
A modified version of phase 1 is still severely restricted. The state authorized the changes after the Tri-City Development Council and other groups called for relief, telling the governor the community was dying.
Dr Amy Person, a health worker for the Benton-Franklin Health District, said the reopening was designed to meet the needs of residents in the area of services they most wanted – restaurants, shops and dog grooming .
The health district, working with TRIDEC and other civic and business groups, is promoting social distancing and mask-wearing with the goal of moving to a modified phase 1 or even phase 2, which would further ease restrictions .
One person said they were optimistic at a weekly “Coffee with Karl” meeting on Zoom hosted by Karl Dye, president of TRIDEC.
“When we have the mayors delivering public health messages, this community will pass,” she said.
Another local organization that has received between $ 2 million and $ 5 million in PPP loans, according to the SBA database, is Goodwill Industries of the Columbia, a Kennewick nonprofit serving people with disabilities.
The money kept more than 350 people on the payroll with benefits during a shutdown that lasted more than three months, said Ken Gosney, executive director, who called the loan a “lifeline.”
It was a similar story for Lampson International, the Kennewick-based crane maker, another company that received between $ 2-5 million.
“This has helped us maintain our current level of staffing,” said Kate Lampson, director of public relations and marketing.
Jim Davis, chief executive of Tri-Cities Community Health, said visits to his clinics in Kennewick and Pasco halved when the stay-at-home order hit.
A typical business would cut staff, but the health clinic was loath to lose its dentists, hygienists, and other experienced professionals. His loan, between $ 2 million and $ 5 million, allowed him to retain a staff that Davis said would take years of recruiting to replicate.
Routine dental visits were the hardest hit. The clinic kept its dentists on the payroll even with reduced workloads. The hygienists, prevented from working by the stay-at-home order, were put on “standby”. This allowed them to collect state and federal unemployment benefits while the clinic continued to pay social benefits, including health insurance.
“I didn’t even want to think that one of our team would have to go through a pandemic without health insurance,” he said.
When dental work was allowed to resume, he returned his staff to full-time status.
By early July, patient volumes had returned to around 80% of pre-Covid-19 levels.
“It got us through this major recession. We didn’t have to worry about where to get the money for the paychecks, ”Davis said. He will ask for a loan discount.
Christensen Inc., a Richland-based fuel, lubricants and propane distributor, said that although it continued to operate as a core business, it saw significant declines in the second quarter due to the pandemic. .
The company was the region’s largest PPP recipient, receiving between $ 5 million and $ 10 million, the SBA said.
“The PPP Loan Assistance Program has accomplished what it set out to do. This has enabled Christensen to keep team members employed, avoid layoffs, and continue to support our communities during this time of crisis. We are grateful for this help and have seen business slowly start to return here in the third quarter, ”the company said in a written statement in response to a Journal of Business investigation.
Michael Atkinson runs two recruitment firms in Kennewick. Agrilabor Inc. and Atkinson Staffing Inc. provide workers for dairies and processing plants for potatoes, onions and other crops. Agrilabor specializes in guest workers who come to the United States under the H-2A visa program.
Agrilabor and Atkinson Staffing received between $ 2 million and $ 5 million each.
PPP loans have offset skyrocketing costs for following Covid rules. Atkinson created a sewing division to produce face masks, which were not available at the start of the pandemic. It has had to increase the number of vehicles it uses to transport workers to workplaces, which has increased the need for skilled drivers, operating expenses and insurance.
Importantly, it helped Atkinson raise rates of pay to incent workers who otherwise would have earned more out of work because of the $ 600 a week federal benefit that expires in July.
“Our expenses have increased dramatically to deal with the virus, and we have to pay more to get people to come to work,” he said.
For the week of June 21-27, the Washington Employment Security Department reported 696,272 jobless claims, down 3.1% from the previous week, but 473% more than the same week a year ago .
Locally, the unemployment rate was 12.3% in May, the most recent available. Unemployment fell slightly from the pandemic peak of 13.5% recorded in April.