ORCHARD PARK, N.Y. — Starting Monday small businesses struggling to pay employees during the COVID-19 pandemic can start applying for the second round of the Paycheck Protection Program.
The U.S. Small Business Administration announced Friday that the $284 billion package will be available in the form of forgivable loans to new borrowers and certain struggling firms looking to get assistance for a second time.
While this second round of funding is about a third the size of its earlier counterpart, for businesses like W.G. Arthur in Orchard Park a 114-year-old staple, getting just a piece of it could have just as much an impact as the help they received last spring.
"We were able to get that CARES Act, Paycheck Protection Program loan to keep people employed so that was extremely helpful for us," W.G. Arthur President Joe Wales said.
Wales added the money helped keep the hardware, furniture, and repair shop's 30 or so employees on the books. The loan does not count toward income and this time around includes a few new features.
"Very small businesses who have loans under $150,000 are going, they're going to ease up the reporting restrictions and really help those businesses get that money granted to them," Buffalo Niagara Partnership President and CEO Dottie Gallagher said.
In the latest round, businesses that received loans last year will be able to borrow up to $2 million as long as they have no more than 300 employees and suffered at least a 25% drop in quarterly revenue.
First-time borrowers with no more than 500 workers will be able to borrow up to $10 million, as reported by the Associated Press.
The loans, which can be forgiven, will have five-year terms and carry an interest rate of 1%.
The Associated Press also reported that the Small Business Administration or SBA will only initially, starting January 11, accept applications submitted by community financial institutions, or CFIs, lenders whose customers are minority-owned and economically disadvantaged businesses.
On Wednesday, applications for second loans will open. The SBA said it would begin accepting applications from all its lenders within a few days of that initial period reserved for CFIs.
Companies will have 24 weeks from the date they receive a loan to use the money. While 60% of the proceeds must be used for payroll in order for loans to be forgiven, companies can use the rest for employee health benefits, mortgage interest, rent, utilities, and expenses that are essential to business operations.
Additional money will also be available for restaurants, cultural businesses, and live venues, Gallagher told 2 On Your Side. She added that most of all owners who may have been denied or didn't apply for the first round of funding five months ago can't be discouraged to not try this time around.
"I just want to reinforce to all those small businesses this is designed to keep you in business it is designed to be a bridge," Gallagher said.
For Wales and W.G. Arthur unfortunately, back-ordered parts, special orders, and other equipment that is unavailable because of supply chain delays can't be solved with money.
"Just a great example we have over $200,000 in orders that customers have placed with us that we can't get ... some dating back to May," he said.
He is, however more hopeful that with COVID vaccinations underway things will get back normal sooner than later.
"I think people in our community, they recognize what we're going through and they try to support us in every way they can. Coming into our store instead of buying online, Amazon," Wales added.
And just like through both World Wars and the Great Depression, Wales is certain they make it through this latest challenge.