Unaffordable Utah: Small Business Survival During Coronavirus Pandemic
SALT LAKE CITY, Utah – The economic shutdown caused by the coronavirus pandemic has Utah businesses scrambling to stay afloat.
“It’s been pretty devastating,” said Diane Etherington, owner of The Children’s Hour bookstore in Salt Lake City. “Our sales were going down, down, down, down.”
With the store closed and savings dwindling, Etherington said she was forced to send eight of her 10 employees home.
“I am worried about them,” she said.
But just this week, some good news about that could pave the way for her to bring those employees back to work.
“My banker just called me today to tell me about them and it sounds like a really good deal,” Etherington said.
Bankers and state leaders are trying to spread the word about financial life preservers to help companies keep the lights on, pay rent and hold on to employees.
“This is a significant opportunity for Utah businesses and we want them to move quickly,” said Miles Hansen, president and CEO of World Trade Center Utah.
Hansen said businesses need to be ready to apply for loans under the Paycheck Protection Program that’s part of the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act.
“Within this package, there’s about $350 billion set aside for small businesses,” he explained.
The loans will be made available to small businesses with fewer than 500 employees. This includes non-profits, veterans organizations, self-employed and independent contractors.
Businesses will need to provide a good faith certification that the loan is necessary because of the current economic conditions.
They can borrow up to 2.5 times their average monthly payroll costs — up to $10 million. The money can be used to cover payroll, rent, mortgages and utilities.
Loans Can Be Forgiven
“As long as companies use the loans for what they’re designed to do,” Hansen said. “Then they will be completely forgiven on the backend.”
The forgiveness of the loan is also dependent on whether the money is spent on those approved expenses during the first eight weeks after it’s received—in an effort to quickly stimulate the economy and bring workers back online.
According to the U.S. Small Business Administration, no collateral or personal guarantees are required for the loans and lenders are not allowed to charge any fees.
“Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels,” the SBA’s website said. “Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
“That is like a huge gift,” Etherington said about the stimulus loans. “As a business owner, it takes a ton of stress off me.”
Once her employees are back to work, Etherington plans to ramp up online and phone orders to bring in additional revenue.
As Good As It sounds
Salt Lake Chamber President Derek Miller described the forgivable loan opportunity as unprecedented and vitally important to help businesses survive.
“It’s not too good to be true; it’s exactly what it purports to be,” he said. “We are seeing war-time levels of spending because we are on a war-time footing right now and the war is to save lives and also save the economy.”
Miller, who is also chair of the Governor’s Economic Response Task Force, said Utah business owners are experiencing financial whiplash.
“It wasn’t too long ago that the hardest thing for a business to do was to find qualified workers,” he said. “How the world has changed in just two to three weeks.”
In addition to the forgivable stimulus loans, the state is offering another lifeline to small businesses: zero-percent bridge loans with no payments for 12 months.
“The idea is that you can get money faster, sooner,” Miller said. “You need it today. You need to pay your rent today. You need to pay your employees today.”
The bridge loans are made available from the Governor’s Office of Economic Development to small businesses with 50 or fewer employees that have been impacted by the pandemic.
The bridge loans will be approved quickly, Miller said, buying the small business precious time to get that larger, forgivable stimulus loan.
“It’s not going to be the millions of dollars the federal government is talking about,” Miller went on to say. “It may be a few thousand dollars but those few thousand dollars can make all the difference.”
Utah leaders and the SBA are encouraging businesses to apply as soon as possible for the loans available through the stimulus package.
“The SBA Utah District Office’s top priority is to assist businesses who have been dramatically and adversely impacted by the coronavirus (COVID-19),” said SBA Utah District Director Marla Trollan in a press release. “We hope to help small businesses stay in the fight and survive the financial impacts of COVID-19.”
SBA lenders can start processing loan applications starting Friday, April 3. In the meantime, businesses can prepare the necessary information using a sample form.
More information can also be found under the “business” section of Utah’s coronavirus website.
In addition, Salt Lake County is launching a business relief hotline. Businesses can call (385) 468-4011 Monday through Friday, 8 a.m. to 8 p.m., to talk with caseworkers about local, state and federal resources available to survive the economic downturn.
“We know social distancing restrictions require businesses to adapt to a safer, temporary reality in order to protect the health of all our residents,” Salt Lake County Mayor Jenny Wilson said in a prepared statement. “Because of this, we believe it’s crucial that the county serve businesses by helping them tap into desperately needed resources as they become available.”
See the latest information from the Utah Coronavirus Task Force here.
- Have you or a family member been affected by coronavirus issues in Utah? KSL TV wants to hear from you. Contact KSL by emailing firstname.lastname@example.org.
- What is COVID-19? Here’s What You Need To Know To Stay Healthy
- What We Know And Don’t Know About The Coronavirus
- Four Common Coronavirus Questions Answered
- The latest coronavirus stories from KSL TV can be found at our Staying Safe: Coronavirus section.
- Your Life Your Health: How can parents prepare their home, children against coronavirus?
How Do I Prevent It?
The CDC has some simple recommendations, most of which are the same for preventing other respiratory illnesses or the flu:
- Avoid close contact with people who may be sick
- Avoid touching your face
- Stay home when you are sick
- Cover your cough or sneeze with a tissue and then throw the tissue in the trash
- Wash your hands often with soap and water for at least 20 seconds, especially after going to the bathroom, before eating, and after blowing your nose, coughing or sneezing. Always wash your hands with soap and water if your hands are visibly dirty.
- If soap and water are not readily available, use an alcohol-based hand sanitizer with at least 60% alcohol.
The CDC does not recommend wearing a face mask respirator to protect yourself from coronavirus unless a healthcare professional recommends it.
How To Get Help
If you’re worried you may have COVID-19, you can contact the Utah Coronavirus Information Line at 1-800-456-7707 to speak to trained healthcare professionals. You can also use telehealth services through your healthcare providers.
If you see evidence of PRICE GOUGING, the Utah Attorney General’s Office wants you to report it. Common items in question include toilet paper, water, hand sanitizer, certain household cleaners, and even cold medicine and baby formula. Authorities are asking anyone who sees price gouging to report it to the Utah Division of Consumer Protection at 801-530-6601 or 800-721-7233. The division can also be reached by email at email@example.com.
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