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For local coffee shops to multistate architecture companies, the Small Business Administration's Payroll Protection Program, known commonly as PPP, has been a saving grace for Iowa businesses.
'We would be really, really struggling without the PPP,” said Steve Shriver, who owns five businesses in Cedar Rapids including EcoLips, Brewhemia and Soko Outfitters. 'I have talked to a lot of the companies that have gotten the PPP, and it's really gotten us all through this.”
The SBA provided more than 61,000 loans to Iowa businesses, according to government data, to continue paying their staff during the coronavirus pandemic.
That included loans between $5 million and $10 million each for five Cedar Rapids companies: Thomas L. Cardella and Associates, Physicians' Clinic of Iowa, Modern Holdings, Van Meter and Shive-Hattery Group.
MCI LC in Iowa City, a holding company for technology business services companies, and ESCO Electric Company in Marion also received loans between $5 million and $10 million.
Another 17 companies in Cedar Rapids received loans of between $2 million and $5 million.
The Gazette and the Southeast Iowa Union, through corporate parent Folience based in downtown Cedar Rapids, received $3.05 million to help preserve 250 jobs in its news organizations, printing facility and corporate offices.
Cedar Rapids' 52404 ZIP code - a large swath of the southwest quadrant that includes The Eastern Iowa Airport area - had the second-most PPP loans of over $150,000 in the state, behind the 50266 ZIP code in Urbandale.
Ray Brown, chief executive of ESCO in Marion, said the assistance has been a 'good backstop.” Otherwise, the company would need to be more defensive with spending.
'It's definitely been hugely impactful for us,” Brown said. 'It's allowed us to navigate some choppy waters, like a lot of other businesses.”
Similarly, Nick Jensema, vice president for finance and controller at Van Meter, a wholesale industrial and electrical supplier based in Cedar Rapids, said PPP has been a 'a financial safety net during a time of great uncertainty.”
'It has allowed us to remain operational throughout the pandemic, serving essential businesses like hospitals, utilities and food manufacturers,” Jensema said in a statement. 'And, most importantly, to keep our people employed and ready to serve customers as job sites and businesses reopen.”
PPP assistance helped Physicians' Clinic of Iowa avoid laying off employees, said Kendra Herdliska, chief human resources and diversity officer.
'Like many other health care organizations, PCI as an organization was directly impacted by required redirection of health care services to urgent and emergent care only,” Herdliska said in a statement. 'The funds assisted us in maintaining our outstanding workforce, as well as the viability of our organization.”
It's not clear yet whether the PPP money alone is enough for companies to make it over the long term.
Even with PPP, PCI needed to reduce staff hours and enact salary reductions for doctors and management as customers held off on non-emergency medical treatment.
Brown said it's too early to say whether the PPP money is enough for ESCO, considering the uncertainty ahead.
Shriver said he doesn't need to wait to see whether it's enough. He's confident the answer to that question is no.
'It's a blip,” Shriver said. 'Getting a cash infusion is not sustainable. It's a Band-Aid.”
Companies can keep the PPP money, the SBA says, if at least 60 percent of the loan goes toward payroll and the rest goes toward rent, mortgage interest or taxes. A company's ability to maintain staff levels or quickly rehire staff determines the level of forgiveness.
But the forgiveness process can be complicated for many smaller businesses, said Ryan Shields, a loan officer at Washington State Bank in Washington, Iowa.
Shields said applying for the forgiveness can be harder for many farmers, for example, than for larger companies.
'A farmer doesn't have the CPAs, the public accountants and legal teams that some of the larger companies have,” Shields said. 'They're more of a one-man show.”
But the SBA 'made it substantially easier” in an updated forgiveness application, Shields said. Still, communication from the SBA adds a roadblock to the process.
'Right now, we don't have any guidance for how to submit these applications that customers are putting in,” Shields said. 'They've made the application easier, but now it's the communication.”
Nonetheless, the loans have made a difference.
'In small-town Iowa, it has helped keep a number of companies afloat,” Shields said.
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