Tag: restaurant

Harrisburg-based restaurant and brewery The Millworks, closed since December, plans to reopen in March.

Ahead of that reopening, the restaurant will receive its second round of PPP. For restaurant owner Josh Kesler, the new round of the Paycheck Protection Program has been a much easier navigate than it was last April.

Since its creation early last year, the program’s restrictions on what businesses could do with the money to receive loan forgiveness was the subject of criticism. In its second go-around, businesses like The Millworks now have up to 24 weeks to spend the funds and can use them on an expanded list of expenses including operations, supplier costs, worker protection and property damage.

Lenders have also had time to streamline their submission processes.

“The first round was helpful but it created a lot of uncertainty and anxiety,” Kesler said. “In the second round, the process was much clearer because everyone including the SBA, financial institutions and borrowers had all been through it before.”

Last month, the U.S. Small Business Administration (SBA) launched the newest round of the program, backed by $284 billion in funding through December’s coronavirus relief bill.

PPP gives eligible businesses a low-interest private loan meant for payroll and other costs. Businesses that follow the program’s specifications can then apply to have their loan forgiven.

The most recent round, which can be applied for until the end of March, allows businesses that never applied to use a process nearly identical to the first round. Businesses seeking a second draw from the program must have 300 or fewer employees, demonstrate a drop in revenue for one calendar quarter compared to the previous year, and show they used all of their first-round money.

This year’s program is also focused on getting funds to smaller businesses. Whereas the first round gave 2.5 times a business’s average payroll costs with a max loan of $10 million, businesses drawing a second time are limited to $2 million.

Despite the new rules, the first two weeks of new loan submission went smoothly, said Nora Habig, M&T Bank’s central and western Pennsylvania region president.

“In the first round we had to set up the process,” she said. “This time it was about changing the things that needed to be adjusted and not so much making the entire process (from scratch).”

In its first two weeks, M&T received more than 14,000 completed applications requesting approximately $1.9 billion in PPP funding for businesses employing about 360,000 workers.

Lenders with more than $1 billion in assets began submitting applications to the SBA on Jan. 18, while smaller banks were approved to begin on Jan. 15.

Jeramy Culler, vice president and business banking manager at F&M Trust, said much of the Chambersburg-based bank’s prep before submissions opened was focused on making the process as efficient as possible for borrowers.

Harrisburg-based Centric Bank had about 755 submissions for $81 million by Jan. 26.

Submissions often spike in the first weeks of the program, according to Patricia Husic, president and CEO of Centric Bank. However, while the program went much smoother than it did the first time, smaller businesses without their own financial staff can still hit roadblocks, she said.

“The moment when these business owners need to get all this data together to submit, they don’t have the sophistication to pull it together,” she said. “When you have a company with a controller, that’s not an issue. A lot of these companies don’t have a CPA on call.”

In a third potential round, Husic said she would like to see the process eased in a way that puts less stress on those companies without readily available financial help.