Small Business Owners See New Bailout Package As A Lifeline

By LaMonte Richardson Jr.
TheStatehouseFile.com

INDIANAPOLIS—Rick Harris’ company, Upland Management, boomed with the rise of the convention business and was on pace to make from $1.5 to $1.7 million this year.

But then came COVID-19, which led to Gov. Eric Holcomb shutting down schools, events, and almost all but essential businesses in March. As a result, convention activity has come to a halt.

“March 3 we were told to pack up all of the booths and have been out of work since,” Harris said.

Small business owners around the country and in Indiana are struggling to bounce back from the disruption caused by COVID-19, the virus that has claimed the lives of more than 3,000 Hoosiers and 180,000 across the United States.

Congress has passed three bail-out packages to help individuals, businesses and other groups to recover from the economic toll of the pandemic. Those packages included an extra $600 a week in unemployment benefits, money to schools, and paycheck protection program loans to businesses.

The paycheck protection program loan was established by the CARES Act to allow small businesses to continue paying their workers, essentially allowing these businesses to stay afloat throughout the pandemic.

“Our most important need out of the Phase 4 CARES Act is for Congress to pass another PPP type loan for small businesses,” said Barbara Quandt, director of the National Federation of Independent Business State.

The NFIB surveyed members and found that 84% of paycheck protection plan borrowers have used up their entire loan. Almost half of those that received the loan anticipate needing additional support over the next 12 months.

These financial struggles are coming because one-in-five employers reported sales levels at 50% or lower than they before the start of the COVID-19 pandemic. And one-in-five of the small business owners who were surveyed said they will be out of business if economic conditions don’t improve within the next six months.

Indiana Sen. Todd Young heard first hand from some local businesses affected by the COVID-19 pandemic when he had an online meeting with members of the Nappanee Chamber of Commerce last week.

There, he told chamber members that efforts to pass another CARES Act bill has hit some friction points in Congress. Those points have centered around the differences between a $3.5 trillion package passed by the U.S. House of Representatives and the $1 trillion package proposed by the Senate, which doesn’t include the extra benefit but provides liability protections for businesses.

Among the differences between the two versions: the House bill includes an extension of the $600 a week supplemental unemployment benefit while the Senate version has liability protections for businesses that reopen and either an employee or customer gets the virus.

“It’s hard, if your business happens to be doing well, to get people to go back to work if they can earn more not going back to work,” Young said.

Upland Management received a paycheck protection loan in April and used the $110,000 to pay four full-time employees, 60 part-time employees, company bills and the owner himself, Harris said.

That money is almost gone and if Upland doesn’t get additional help from new bail-out legislation, the company will be out of business by November, Harris said.

The pandemic has not hurt all businesses. Some have seen improvements in sales and profits through the crisis, especially those that don’t rely on event-driven activities.

“Some people have characterized this recovery as K-shaped—you’ve got some people who are doing real well because of the business they’re in and others can’t even go to work, ” Young said.

On both sides of the K-curve is former U.S. Rep. Marlin Stutzman, owner of The Barns at Nappanee. In the Chamber of Commerce meeting with Young, he noted how his different businesses were affected by the COVID-19 pandemic.

He said his family’s food, agriculture, and power tool business have done well throughout the pandemic.

“The outdoor activities and food, agriculture are fairly strong, but anything restaurant-related, entertainment related, venue related, anything event-related has definitely been affected,” Stutzman said.

The NFIB showed that those some businesses continue to thrive through the pandemic, a significant percentage will not survive without additional help. Businesses like Harris’s along with many others will no longer be able to operate unless they receive funding from an additional paycheck protection program loan.

“We need to do something,” Quandt said. “Some businesses are just not going to survive, ”

FOOTNOTE: LaMonte Richardson Jr. is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.