While small business owners have one more week to take advantage of the federal government's paycheck protection program, one Massachusetts woman has already done so and is using the loan to transform her restaurant.
Grendel’s Den Restaurant and Bar is back in business, but luckily the Cambridge restaurant was able to reinvent itself when the coronavirus hit.
"I had to move quickly and devise ways of being connected to the people, both the staff and the clientele," owner Kari Kuelzer said.
Kuelzer says her business turned to creating subscription grocery delivery boxes to produce revenue. She also developed a digital platform, allowing for virtual events to keep her customers engaged. All of this she says was possible through the Paycheck Protection Program loan she received from the federal government.
"It seems like we wouldn’t be doing anything because we were closed, but we decided to invest in the brand and retain connections with that money," Kuelzer said. "We needed human beings to do that. I really needed to spend money on payroll as intended, plus I created new work for young people who aren’t getting any from the CARES Act."
To date, the Small Business Administration has approved over 106,000 personal protection program applications in Massachusetts, worth more than $14 billion. If your business has not yet applied for a loan, the SBA says now is the time to start talking to lenders. The deadline to apply is June 30.
More on PPP Loans
"At the end of the day, our goal is that our businesses are still up and running and around and that we don’t have closures of businesses," said Robert Nelson, Small Business Administration District Director for Massachusetts.
New to the PPP program is the addition of the Flexibility Act which incorporates a lot of key provisions that small businesses were looking for, like being able to spend 60% of their loan on payroll instead of 75%.
"They can spend 40% on mortgage interest, rent, utility payments, where it had been 25%," explained Nelson. "Under the old rules, businesses had to spend the money within 8 weeks. Now they have up to 24 weeks to spend the money. There are key provisions in there which make the ability to make these loans 100% forgiven."
Also under the Flexibility Act, borrowers are not going to be penalized with reduced forgiveness if they’re unable to find qualified workers, or if they don't restore operations to pre-COVID 19 levels. These are changes intended to calm business owners, whose futures are still uncertain.
"Fortunately, the lending and some of the aid has been able to let us keep our foot in the door so to speak, but we are going to need more help," Kuelzer said. "All of the small businesses are going to need more help."
For loans that are approved after June 5, the loan term has increased to five years instead of two.