Some Hoosier business owners are still struggling after the first round of federal stimulus dollars dried up.
In March, the federal government approved a multi-billion dollar relief package called the Paycheck Protection Program.
“I applied first thing in the morning, got up, got my coffee and got my application through,” says Jennae Schenk, owner of Elegant Hair Designs.
Jennae Schenk inventories product in her South Indianapolis salon.
She remembers the day she told her four employees she was closing her Southside Indianapolis salon because of the Coronavirus
“When we first had to shut down they were saying two weeks, oh two weeks, we’ll be fine for a couple weeks, then it was two more weeks.”
Now weeks have turned into months, and adding insult to injury, Jennae never got her loan money even though she met the criteria and her application was approved.
“Last week, I got the message from my lender, but all the funds ran dry,” Schenk says.
Jennae’s husband is able to work during the pandemic so she has some money coming into the household, but she worries about paying her employees and her rent.
“He’s not demanding the rent right now, but it’s going to come due, the minute I start working he’s gonna want that back pay,” Schenk adds.
Schenk also applied for an Economic Injury Disaster Loan when her business first shut down. Funds from that program come from a different pot of money, and a Small Business Administration official says many of those loans are still being processed.
As for the Paycheck Protection loans, the SBA says 36,000 loans were approved in Indiana at a value of $7.5 billion. The money was not loaned out on a first come first served basis.
“Whether you’re a big lender or the smallest of the small lender, no one had an advantage, it was all a fair playing field,” Regional Small Business Administrator Rob Scott says.
The Paycheck Protection Program experience varies from business to business. Jeff Mease owns Pizza X, which has five locations in Bloomington.
A worker prepares a pizza for delivery at Pizza X's 10th street location in Bloomington.
He got his loan money Tuesday, just 10 days after he applied for it.
“We were a little late, I think we filled out the application five times because our banker kept asking us to fill it out different ways,” Mease says.
But the PPP loans are only forgivable if they are used for specific expenditures such as employee payroll. Mease gave his employees a 75% raise through June.
“Our restaurants that are shut down, really aren’t in a position to borrow it and have it forgiven,” Mease says.
And although Mease is running delivery and take out orders, it’s not enough to make up for the loss of in store sales as well as his catering service and the other restaurants in his portfolio.
“We still have tremendous amounts of overhead to pay. We also have the losses, what happens to all the food that we had in our inventory when we shut down,” Mease says.
Mease says every business owner needs to consider how reopening will affect the situation around them. Some, like Jennae Schenk believe the sooner the better.
“I think there is a way we can open and do our job safely, our industry is heavily governed anyway when it comes to sanitation,” Schenk says.
Indiana’s stay-at-home order is set to expire on May 1. Governor Holcomb says his administration is working on a plan now to reopen the state’s businesses.
Congress is set to vote on an additional $480 billion relief package for small businesses.
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