Recent federal data shows that nearly 1,375 local businesses received federal stimulus and Payroll Protection Program funds that helped them from shutting the doors permanently, said area owners.
The data released from the U.S. Small Business Administration shows that in Narragansett, South Kingstown and North Kingstown, about 165 businesses qualified for these federal funds exceeding $150,000 while about 1,210 met requirement for grants and loans under that amount.
“We really couldn’t have survived,” said George McAuliffe, business manager at the popular Mews restaurant on Main Street in Wakefield who has watched the coronavirus’s economic affects shrivel revenue until recent relaxing of dining restrictions.
It’s a story other business owners in South County tell as well.
“Without it, we probably would have had to temporarily close,” he added about receiving over $150,000 in federal funds that enabled the restaurant to preserve nearly 40 jobs.
The PPP is linked to the federal CARES Act rescue package that Congress passed earlier this year to help buffer against the harsh financial downturn resulting from the COVID-19 pandemic. It has been changed and extended since then to further help businesses.
Ranked among the top five businesses in the local area receiving $1 million to $5 million in assistance, along with self-reporting on jobs saved, are:
$2-5 million, Perspectives Corporation, North Kingstown, 500
$2-5 million, Arnold Lumber Co., West Kingston, 183
$1-2 million, NGC, Inc., Narragansett, 76
$1-2 million, Interstate Navigation Company, Narragansett, 55
$1-2 million, HV Industries, Inc., North Kingstown, 132
Exact loan amounts were not disclosed by federal officials. With those receiving under $150,000, the list shows about 14,700 individual Rhode Island employers getting loans and the average for smaller businesses about $38,500.
Joseph Viele, executive director of the South County Chamber of Commerce, said that all these businesses collectively underpin the local economy.
“If we didn’t have access to money to keep people employed, I don’t think enough businesses have reserves for paying staff. For instance, if (a business) had $50,000 back on March 15, that money would go to keeping the lights on. There wasn’t enough money for payroll,” he explained.
He said that the program, which may be either loan or grant depending on each businesses’ use of the funds and business circumstances, has helped both the business and the employees, even if it just paid for them to remain at home during the more severe forms of the shutdown from the virus.
PPP loans are not made by SBA. PPP loans are made by lending institutions and then guaranteed by SBA. Accordingly, borrowers apply to lenders and self-certify that they are eligible for PPP loans. Among those receiving funds in the $669 billion loan program nationwide were more than 2,400 in Rhode Island.
Kevin Durfee, owner of George’s of Galilee in Narragansett, received between $350,000 and $1 million in federal assistance and showed he preserved about 79 jobs. While appreciative of the program, he said, its approach needs further readjusting.
“We were told to pay staff regardless of whether they were working or not. The intention was to get people off unemployment while they are home. This was supposed to take people off a state funded program and put them on a federal program managed by small businesses,” he said.
This means, Durfee added, that federal PPP would take people off one federal program and onto another “which makes little sense.”
He also said that the rules for loan forgiveness are too vague and that he has not received specific guidelines about what can disqualify a business from loan forgiveness or the kinds of information a bank will need from businesses for the loan forgiveness application.
“This is very dangerous for a small business which had paid employees to stay home, which under normal circumstances a small business would never ever do. I would say that 50 percent of the funds I allocated for payroll were wasted on people who were not working, so basically that money vanished and did my business no good,” he said.
He said that “for the government to tell a small business to waste it and then tell them that their loan will not be forgiven because of a small basically unknown technicality written into the middle of the actual bill, it could destroy a business.”
He said that 100-percent forgiven loans will help businesses and employees. “I would most likely use 100 percent of the funds on payroll and none on rent and utilities because my payroll is so high this time of year,” he said.
“Bottom line, if my loan will be completely forgiven, it will have helped my business and employees,” he added.
At the Mews restaurant in Wakefield, McAuliffe has been grappling with the economic affects that have cut into that restaurant’s operations.
In a May interview, he said that he, along with owners Dan Rubino and Dave Barnes, had to decide nearly overnight whether to start curbside food service that was never previously offered.
“It was difficult, the building doesn’t accommodate it, it’s not close to serving facilities,” and was just a major headache, McAuliffe said, including the layoff of staff as affects from the coronavirus stifled the business environment.
With the federal funds, he said in an interview this week, the money helped to keep some staff, prevent the books from tumbling into an abyss of red ink and the restaurant run at a minimum capacity.
His story, following the same path as some other South County businesses, doesn’t have a rainbow over it, but at least the storm clouds are not as threatening now, he said, echoing the sentiments of other retail, commercial, restaurant and service industry owners who have benefitted from the federal loans and grants.
“It definitely made the difference in helping us with operations, and with changes now in some rules and giving us more time for bringing on staff, it’s even better,” he said.