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Home News and Features How’s Business? One Year Later, Businesses Say PPP Loans and Grants Kept...
How’s Business? One Year Later, Businesses Say PPP Loans and Grants Kept Doors Open
When the word COVID first began creeping into our lunchtime lexicon, little more than a year ago, many Montpelier area businesses hardly noticed. At Rabble-Rouser, the Savoy Theater, the North Branch Café, Green Mountain Community Fitness, and beyond, minds were far more focused on clearing off what was on the plate in front of them and planning the menu for the coming year. At Green Mountain Community Fitness, Gail Pivetti and the team were trying to merge two different membership systems, the one they inherited from First in Fitness and the one from their former business, Green Mountain CrossFit. At Rabble-Rouser, owner Jacquelyn Rieke was still trying to catch her breath, as the business had grown at least three times larger in the six months prior. Lauren Parker at North Branch was basking in the success of January and February, her two best months ever, and considering how to further the good fortune. Then Tom Hanks got the virus, and the world collapsed. Two days later, Governor Phil Scott issued an executive order to declare a state of emergency in Vermont, followed shortly by the “Stay Home, Stay Safe” order that closed “in-person operations for all non-essential businesses.”This was a particularly bitter pill to swallow for the Montpelier area business community, who relied heavily on the organic, face-to-face foot traffic, even if most assumed the pandemic would only last a few months, if not weeks. As each day in March and April brought new gloom and a harsher reality, businesses began to calculate and fret, assuming they’d be going through this alone and without much support from the government in D.C. “I didn’t think we’d get anything,” Lauren Parker remembers. “I didn’t expect it under Trump. I didn’t think that administration would give two hoots about a small business in Vermont.” Rieke had no idea either. “It didn’t dawn on me that we would get support,” she remembers. It wasn’t even on my mind.” Gail Pivetti at Green Mountain luckily had some friends who gave her hope. “We have some members here and some folks who we know, who were fairly plugged in government wise, and they told us, ‘Hang on, we think some stuff is going to start to happen,’ but we had no idea how much money was going to come through and how long that was going to last.” With the passage of the CARES Act in late March 2020, the possibility of financial support became more real, albeit with far more questions than answers. Happily, Montpelier Alive stepped confidently in to provide much needed guidance and support, earning praise from just about everyone. “Montpelier Alive was one of our best sources of information,” relates Pivetti, They were really, really communicative in the beginning, which was super, super helpful.” Parker echoes the praise, particularly for Executive Director Dan Groberg. “I’ve talked to businesses in other parts of the state similar to ours. Nowhere else was there anybody like Dan. We knew everything, because he was on it, he learned it, he figured it out. He distributed it to our Facebook group. We had meetings every week, instead of once a month.” The diligence and attention soon began to pay off as PPP money flowed into Montpelier business coffers, but not without trouble, particularly in the first rush, when there seemed a limited amount of funds and time available to obtain them, as well as no clear system. “They had the first round,” Parker remembers, “and it was immediately eaten up by all these giant corporations in the country. Everybody was terrified the money was going to run out and there was so much pressure.” Even the bank could make a difference,” Parker notes. “Our bank is TD Bank, which is a bigger bank…so it took forever for the forms to be ready. I felt like people who had Northfield Savings Bank or Community National Bank…were already getting paid before I was even able to apply. It felt like, ‘Oh, my God, the money’s going to be gone.’” James O’Hanlon at the Savoy Theater also recalls people simply not applying because the process was so overwhelming at first. For his own business, he also questioned whether it was even worth applying for a PPP loan as there was a real danger he would never open again or be able to use the money in the stipulated timeline, potentially leaving him with the debt. For all the confusion and scrambling, most who applied ultimately received support. Of arguably more value than the money was the hope the funds brought to businesses, as many questioned whether or not they’d survive. “PPP just allowed us to breathe and think, okay, we might be able to keep our doors metaphorically open,” Pivetti remembers. “Had it not been for PPP, I think that the situation would have been much, much worse.” Other grants helped fill in the gaps, including MEND, the EIDL Advance ($1,000 per employee), the State Emergency Economic Recovery grants, HartBeat of Main Street grants, the E.M.B.R.A.C.E micro business recovery grants, and the State Sole Proprietor grants, among others. If the support seems significant, the need was even more, and remains so, according to Groberg. “On the whole, businesses have seen significant losses due to the pandemic,” he points out. “Businesses were on average down about 25 percent on the year, with restaurants being down more. About 60 percent of their losses were covered by grants,” again noting the wide disparity in situations. “The impact from business to business varies dramatically based on individual circumstances. For some, cutting payroll and reducing inventory purchasing might make up a good chunk of the uncovered loss. For others, especially restaurants, we are looking at hundreds of thousands of dollars of loss.” Not every area business was able to find support, thanks to quirks and loopholes in the law. Newly opening businesses that either started just before the pandemic or soon after were able to provide enough of a history to show a 25 percent or greater reduction in gross revenue from 2019 to 2020. At Green Mountain Community Fitness, efforts to obtain the necessary grants were challenged by the change in the business. “The grant money was based on the previous year’s tax records,” Pivetti noted, “We had spun up a business that was going to have a higher tax base than the one we purchased, so we were in a situation where the rules and the guides weren’t super applicable.” Parker also points to issues with the determinations based on the tax base, noting that significant parts of her business, such as food, are not taxed. “It was hard for us to fit into a category because they did 10 percent of your reported tax income. I think [the grant] ended up being like 55 percent of our total income.” Sharon Whyte Estes, who opened Althea’s Attic in November 2020, also did not qualify for PPP and grants, which left her to forge a new, sustainable business model. Nonetheless, in the need to pivot online, she wishes more support was given to businesses to upgrade technological capabilities. “Some people were frustrated that they didn’t qualify for the first round of state aid because their losses were significant enough, especially those who had hustled extra hard,” Groberg said, but he adds, “There are ongoing efforts to rectify this,” noting the upcoming Shuttered Venue Operator grants. “Some businesses, especially newer businesses, haven’t qualified yet for any state aid but may be eligible for the new $10 million pool that the Vermont House approved yesterday.” Looking ahead at the remaining months of the pandemic, most businesses appear optimistic at their ability to survive but believe more support will be needed. “I think it’s absolutely necessary,” Pivetti explains. “Honestly, I think the tragedy would be for people to have received two rounds of funding and then go under. That feels like such a sunk cost, from the government’s perspective, if they put in two rounds of funding for a business and it still couldn’t make it because they didn’t ride it out.” Rieke, while confident about the future, also notes the huge ongoing losses to her business. “January, we saw a $15,000 loss, and depending, we could lose $10,000–$15,000 in February, March, and April. So getting that second round of CARES Act money, or getting third round PPP, would be amazing for our stability.” Groberg also stresses the need. “For the most part, I see that businesses are hanging on and hoping for a return to normalcy. Almost a quarter of local businesses tell us that they aren’t sure they will make it through this. We are hopeful that additional federal funds like PPP, SVOG, and whatever comes out of the latest stimulus will help.”