49 Alpena businesses got millions in PPP loans, feds say
ALPENA — Forty-nine Alpena businesses received combined between $17.4 million and $43.5 million from the U.S. Small Business Administration in the form of Paycheck Protection Program loans, the federal government said this week.
The Paycheck Protection Program is a loan designed to provide an incentive for small businesses to keep workers on the payroll during coronavirus-related economic shutdowns. Loans can be forgiven if businesses use funds for eligible expenses, especially paying employees.
Of the $1.6 billion offered to Michigan businesses from the loan program, up to $42.5 million was provided to Alpena businesses, according to data released by the Small Business Administration. The exact amount of each loan was not shared in the report. Instead, a range of the amount given to each business was provided.
Thunder Bay Therapy and Sports Medicine didn’t lay off any employees before it was awarded $250,000 in the second round of loans.
The wait was nerve-wracking, said owner Bruce Duncan.
To pay salaries, he dipped into the business’s cash reserves, not knowing when — or if — the loan would be approved.
Income will be slim for the next month or two, he knows, since the business receives insurance payments weeks after clients visit the therapy center, and the number of appointments was far below normal while people were ordered by the state to stay at home to prevent the spread of the coronavirus.
With changes seemingly daily at the state and federal level regarding COVID-19 response, Duncan is nervous the government will change the terms of the loan, potentially requiring him to pay back tens of thousands of dollars he can’t afford.
“That doesn’t make for good sleeping at night,” Duncan said.
The PPP money, received in a smooth bank transition shortly after it was awarded on April 27, will allow his 25 employees to help the increasing number of clients seeking therapy as medical centers resume nonessential surgeries, Duncan said.
Almost $2.5 million awarded to Alpena Community College will be used to fund two-and-a-half months’ salary for about 110 employees, college President Don MacMaster reported.
The money will be “a cushion to backstop a lot of bad financial news that might come down the road,” MacMaster said.
Schools are predicting big cuts in state revenue after the pandemic shutdowns drained billions of dollars from state coffers.
If more than 75% of the loan is used toward payroll, the full loan will be forgiven, and MacMaster said that won’t be difficult, as 85% of the school’s expenses go toward salaries.
At Young’s Appliance in Alpena, the more than $325,000 received from the Small Business Association will help the business get back to the 41 employees actively working before the coronavirus reduced its staff to the low teens.
The pandemic hit Michigan just as Art Van Furniture, sister store to Young’s Appliance that shared the same building, was closed when Art Van corporate declared bankruptcy.
“We were caught in the crosshairs,” said owner Bob Young, who absorbed the Art Van furniture inventory into his appliance business.
While most of his staff was laid off and many were worried about their futures, a supportive public eager to buy furniture and appliances — including a run on freezers to hold large supplies of meat in the event of an economic emergency — helped his store get back to full swing.
Plants that produce home goods are now back to production after many closed down when they lost workers to illness, Young said, so stores are more likely to have the supplies people need.
With the help of PPP loans, stores will also be able to afford the employees needed to take care of their customers, although some employees are still nervous about coming to work, Young added.
Through June 30, the Small Business Administration has awarded $521 billion in PPP loans, supporting 51.1 million jobs — including 1.6 million in Michigan — or as much as 84% of all small business employees, the agency said in its report.
Businesses can still apply for the $132 billion remaining.
Julie Riddle can be reached at 989-358-5693, email@example.com or on Twitter @jriddleX.