The Paycheck Protection Program (PPP) has seen many changes since it first launched in April to provide financial support to businesses impacted by COVID-19.
The federal relief program managed by the U.S. Small Business Administration has dished out billions of dollars in forgivable loans to nearly five million businesses that covered 2.5 times monthly payroll. The initial $349 billion allotted for the program was depleted in 13 days when applications opened in April, and since extending the program, some funding still remains, and some of the rules on how to use the funding have changed. Just yesterday — when the second round was supposed to close applications — the Senate announced it was pushing to extend PPP again until Aug. 8.
We first checked in with D.C. area organizations about their loan application process in early April, and then followed up above approval rates. Now, here’s how some of those local businesses are operating more than two months later, and thoughts from their leaders on PPP loan forgiveness.
Mark Sussman, CEO of Wharf-based OurStreets, submitted a PPP loan application on April 4 through BBVA USA, but he said the company had to apply through three different banks before finally getting approved. Sussman said he gives the company a “75% chance” of getting its PPP loan forgiven.
“As a tech company that produces a mobile app and SaaS product, the majority of our monthly costs are payroll, so we’ve used PPP money almost exclusively for payroll,” Sussman said. “We’ve followed all the rules of the program, but given the ever-changing yardstick for the program, I have some doubts as to whether or not it will be forgiven.”
OurStreets received one of D.C.’s microgrants and its continually looking for other financial support opportunities. Sussman said without the PPP funding, the startup would have “closed up shop a month ago.” He also expressed some doubts about OurStreets’ future and plans to keep employees paid in some capacity.
“With COVID-19 cases spiking across the country and reopening efforts on pause in some places, our business outlook is as uncertain as it was in April,” Sussman said. “Starting next month, my cofounder and I will stop taking a salary and we’re moving all our employees to part-time in order to extend our cash on hand through the end of the year.”
Despite showing success with its OurStreets Supplies program, Sussman said it has been hard raising venture capital at this time. His hope is that the company’s salary changes will buy some time for other financial opportunities to arise.
Gregory Scott, president and CEO of Springfield, Virginia-based software integration company Service Robotics & Technologies (SRT), submitted a PPP loan application through Bank of America and was eventually approved despite the puzzling process.
“Submitting to BoA was like throwing an application into a black hole. Calls to their support team provided no information on status or timeline to expect completion,” Scott said. “We anticipate it being forgiven and are awaiting instructions from BoA now that the final legislation on managing PPP has passed.”
SRT also secured grants from the Navy SBIR program and the Commonwealth Research Commercialization Fund. He also said the company has been “hiring instead of firing,” including adding two full-timers and four paid interns since May to its team.
Tech inclusion nonprofit Byte Back was approved for a PPP loan with TD Bank on April 9. The organization’s financial director, Isel Perez-Castellanos shared this statement with Technical.ly:
“We have our forgiveness application and support documents ready to go following the government’s Small Business Administration revised forms. We are waiting for the bank to make the official online forgiveness application available. The good news is that, according to our internal calculations, we will be able to have the entire loan forgiven. And most importantly, thanks to the PPP loan, we haven’t had to layoff staff. The PPP loan has helped us stay afloat these months, but we know the long-term impact of the pandemic is hard to predict.”
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