COVID-19

How some of the 5.5 million businesses that got PPP loans spent the money

Marielle Segarra Jul 7, 2020
Heard on: Marketplace
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A bartender mixes a drink at a Maryland restaurant. PPP loans allowed some bars and restaurants to stay afloat during the coronavirus pandemic. Alex Edelman/AFP via Getty Images
COVID-19

How some of the 5.5 million businesses that got PPP loans spent the money

Marielle Segarra Jul 7, 2020
A bartender mixes a drink at a Maryland restaurant. PPP loans allowed some bars and restaurants to stay afloat during the coronavirus pandemic. Alex Edelman/AFP via Getty Images
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The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.

There are some familiar names among the tens of thousands on the list: Kanye West’s fashion line, Yeezy, got between $2 million and $5 million. TGI Fridays and P.F. Chang’s received between $5 million and $10 million. What did the businesses we probably haven’t heard of do with their PPP money?

When New York City locked down in March, Short Stories, a cocktail bar and restaurant, furloughed its entire staff of 15. Then it got a $90,000 PPP loan.

“We brought back a bartender, and we’re hiring new bartenders. And we brought back our old porters and security people,” said Ashwin Deshmukh, a partner at the restaurant. He said the loan money has allowed Short Stories to take some risks to make up for lost revenue. 

“We were open till 4 a.m. on the weekend before, and that was a decent amount of our weekly profit,” Deshmukh said.

So the restaurant is trying things like cocktails and picnic baskets to go. If it weren’t for PPP loans, some businesses might not have reopened at all. 

“If we did reopen, I don’t know that it would have been at the capacity that we have,” said Mariel Arbuckle Terone, part-owner of Left Coast Seafood, a casual dining restaurant in Venice, Florida. 

“It may have looked like us being open only five days a week, only being open for dinner versus lunch and dinner,” she said. With the loan, the restaurant is open seven days a week and it’s brought back 80% of its employees. She said the money is running out, and the restaurant might have to start laying people off again. 

These loans were not always easy to get. The first round of funding ran out in just under two weeks. Meanwhile, a lot of banks didn’t really know what was going on. Sally J. Cram is a periodontist in Washington, D.C. 

“They didn’t have all the information and were getting things that would change and require you to provide different documentation every day,” Cram said.

Her practice’s PPP loan of $116,000 has allowed her to bring back a dental assistant, two hygienists, two receptionists and an accounting professional. 

COVID-19 Economy FAQs

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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