The passage of more federal funding for small business means other business owners like Johanna Ames, who owns Ames Linen Service, can apply for help after being economically impacted by the coronavirus.
Ames, a textile rental company that serves the health care, hospitality and food and beverage industries in Cortland and other counties, is one of the few businesses in the state to receive funding through the federal Payroll Protection Program.
“I applied for the PPP funding on April 4,” said Ames, who is the fourth generation to own the company. “I received the funding requested on April 14. I researched the program extensively from the time of its rollout and was prepared to submit as soon as the application was available.”
The $349 billion program ran out of money two days later.
However, President Donald Trump signed legislation Friday for a $500 billion coronavirus spending package, of which $250 billion would be used to replenish the fund for small and medium businesses.
The payroll program provides forgivable loans so businesses can continue paying workers while forced to stay closed for social distancing and stay-at-home orders.
Ames got help from her bank to sign up for the program. Ames did not say how much she received.
“This program helps me to offset a portion of the significant losses in business we have experienced due to the COVID-19 pandemic,” she said. “It will fund my payroll expense and other expenses such as utilities for an eight week period.”
Ames said she employs 85 people.
It is unclear how many businesses in Cortland County applied for either that program or an Economic Injury Disaster Loan, said Garry VanGorder, the executive director of the Cortland County Business Development Corp. and Industrial Development Agency.
The Economic Injury Disaster Loan provides capital loans of up to $2 million for small businesses, according to the U.S. Small Business Administration.
“Those who were in the EIDL queue should be hearing more soon,” he said. If they have not yet applied, they should do so as soon as the program is recapitalized.
Businesses that have not heard back on PPP or have yet to apply should contact their lenders for more information. Businesses should call their banks, or other lenders now that the new cash is coming in for the program.”
Ames said the Payroll Protection Program does have one flaw. It requires that 75% of the funds be used to pay for employee payroll if the company wants to seek loan forgiveness.
“Many businesses, including mine, are either producing significantly less work or not able to work at all, and face the prospect of repaying the funds or converting them to a loan,” Ames said. “I hope that the government will address this challenge to allow businesses a longer period to use the funds for payroll when they actually have work to do. It does not make sense to bring people back to work when you don’t have work for them to do.”
The Associated Press contributed to this report.