$ 284 billion begins to flow to small businesses on Monday
Small businesses in Hawaii can enjoy up to $ 284 billion in federal aid starting Monday, as the US Small Business Administration restarts its paycheck protection program with new rules designed to respond to criticism of the initial program.
Companies that received loans under the first PPP program will be able to get second loans if they meet certain criteria.
More … than 25,000 Hawaiian companies shared some $ 2.5 billion granted under the first program, which provided for loans that did not have to be repaid if they were mainly used to cover the wage bill of employees. The loans have gone to a variety of players, from small surf schools to large beach resorts.
FCH Companies, owner of Zippy’s restaurants, got the maximum of $ 10 million, for example, as did Kyo-ya Hotels & Resorts, which owns the Moana Surfrider Hotel, the Royal Hawaiian Hotel, the Sheraton Waikiki Hotel, the Sheraton Princess Kaiulani Hotel and the Sheraton Maui Resort & Spa.
While it has helped many businesses, the program drew criticism from companies who couldn’t qualify for loans and others who said the restrictions made the program impractical to use.
The program has also been criticized after reports that dozens of large companies and publicly traded companies, including major franchises like Ruth’s Chris steakhouse and Shake Shack burger joints as well as big companies like the Los Angeles Lakers, have received millions of dollars in loans intended for small businesses. The backlash has led dozens of companies to commit to return funds.
The SBA has sought to respond to criticism with many adjustments. For example, to ensure access for the poorest borrowers, when the program is launched on Monday, only community financial institutions will administer loans for PPP borrowers for the first time, said Miryam Barajas, SBA’s regional communications director for the Western US and Pacific region.
Plus, while previous loans had to be spent quickly, businesses now have up to six months to use the money. In addition, eligible expenses now include operating expenses, property damage costs and supplier costs, which were not included in the previous program.
Existing PPP borrowers are now eligible to apply for a second loan if they have no more than 300 employees, have used the first loan for an authorized purpose, and can demonstrate that they have experienced a drop in their gross income of up to minus 25% in 2020 compared to the previous year. , said the SBA.
Grants for music halls are coming soon
Businesses that get a second PPP loan will be able to go through banks as well as community institutions, Barajas said.
“Today’s advice builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to secure their path to recovery,” said SBA administrator Jovita Carranza said in a press release.
In addition to the PPP loan, the SBA is working on a separate grant program specifically designed for entertainment venues. Known as Save our steps, the program is designed for music clubs, cinemas and other attractions affected by the pandemic.
The program is expected to start receiving applications on Jan. 17, Barajas said. But SBA is in the process of finalizing the details.
“We haven’t published the guidelines and rules for what this will look like,” she said.