Paycheck Protection Program provided lifeline to businesses

Dec 10, 2020 By NATHAN MAYBERG 7 min read

Hundreds of small businesses in Lee County were aided by the Paycheck Protection Program this year, providing much-needed relief to companies who suffered through the devastation caused by state-ordered and locally-mandated closures and restrictions during the COVID-19 pandemic.

Total tally: An estimated $1.5 billion for Southwest Florida businesses, more than $30 billion statewide.

While largely considered a success for getting businesses through the toughest times, U.S. Senator Marco Rubio has called for a second round of aid.

Rubio, who chairs the Senate Committee on Small Business and Entrepreneurship, called for a second round of PPP at a hearing he convened Thursday to “fix problems identified” with the first round of PPP and “protect small businesses through the winter.”

In a statement issued at the hearing, Rubio said “The pandemic is still raging. Lockdowns are again being placed on small businesses, and consumer activity is falling.”

In Lee County, the biggest recipients of PPP funds as listed by the Small Business Administration were largely home builders, roofing companies, building contractors, landscapers, health care providers and car dealerships, most of which are based in Fort Myers.

The biggest listed recipient of payment protection program funds in the county was Western Global Airlines, an air cargo airline, at more than $8 million, according to data released.

A message left with CEO Jim Ness was not immediately returned.

Other top recipients listed in Lee County include Fort Myers-based Juniper Landscaping of Florida, at $7.6 million; Power Services Group of Cape Coral at $7.47 million; Benecard Holdings Inc. of Bonita Springs, at $7.34 million; and Radiology Regional Center in Fort Myers, at approximately $6.6 million.

Some notable names of larger recipients listed in Lee County was the Fort Myers law firm of Henderson, Franklin, Starnes & Holt, at $2.8 million and the Fort Myers Broadcasting Company, which includes WINK-TV, at $2.1 million.

Many smaller businesses also were listed as having received PPP funds such as The Homes Clinic in Cape Coral, at $27,174. YPCS Trucking in Cape Coral was one of the smallest recipients listed, at $4,219.

More than 380,000 small businesses in Florida received PPP funds of less than $150,000. Small businesses are defined as having up to 500 employees.

About 150 business in Lee County were steered through the process of applying for PPP loans by the Small Business Development Center at Florida Gulf Coast University. The center operates under a grant through the university.

All of those businesses which were processed through the center also received Economic Injury Disaster Loans (EIDL), which are grants of up to $10,000.

Businesses could receive $1,000 for every employee up to $10,000 for the grant.

Neil Shnider, a local CPA who works part-time for FGCU’s Small Business Development Center, helped guide businesses through the application process. Although the EIDL money was advertised as grants, he said the Treasury Office is making businesses who have had all of their PPP loans forgiven pay back the EIDL money as part of a five-year 1% loan.

“The IRS has told us the EIDL grant will be taxable,” Shnider said.

Shnider says he doesn’t think that is the way the program was intended to be used under the CARES Act.

“The intent of the law was to give free money,” he said.

Currently, the center is helping businesses fill out applications to have their loans forgiven. Shnider credited local chambers of commerce with helping to get the word out about the program.

In Southwest Florida, approximately $1.5 billion in PPP funds was allocated to businesses, according to Shnider. Shnider attributed the figure to the Lee County Economic Development Office.

Shnider said the amount of PPP funds businesses received was based on the number of their employees and the amount of their payroll. The formula was essentially 2.5 times the monthly payroll for a company.

More than $30 billion was distributed statewide to companies through the Small Business Administration as part of the CARES ACT. Nationwide, more than $525 billion has been distributed to more than 5 million small businesses and nonprofits, according to U.S. Sen. Marco Rubio, R-FL.

According to Rubio, more than 70% of small businesses in the country received PPP funds.

Lee County’s tourism-driven industries were particularly hard hit.

The Pink Shell Resort in Fort Myers Beach received approximately $1.96 million in PPP loans.

“It helped a lot,” said Pink Shell Resort co-owner Robert Boykin. “Before we even had the money, we made decisions based on the assumption we would have the money.”

The hotel was able to keep 150 people on staff during the worst part of the pandemic when all hotels were closed on Fort Myers Beach except to accommodate essential personnel for about six weeks.

“We were able to bring back the majority of folks and keep them working,” he said. Without the funds, many more would have been laid off.

Boykin said he is still not sure how much of the loan he will have to pay back.

“There is some uncertainty,” he said.

Based on information from the U.S. Treasury Office his company has received, there may also be tax implications for those who accepted the funds which requires his company to fill out tax forms.

Boykin said the process is a “pretty inefficient way to do things. Why not just pay people and make it tax-free?”

According to Shnider, the PPP loans were distributed at a 3% interest rate but much of it can be forgiven if 60% of the funds were used for payroll. For the funds to be 100% forgiven, the rest of the PPP loans had to be used for either rent or utilities, he said. “

The whole point of PPP was to keep your people employed,” Shnider said.

“It’s cheap enough money. If it turns into a loan, it’s better than no loan,” Boykin said. “This was a pretty good program for government work. It got the money out fast and where it needed to be.”

Boykin said that when the loans were taken out, he was “operating under the assumption it would be forgiven, if not all of it.”

Boykin is hopeful the process could be smoothed out when a new presidential administration takes over and new rules may be considered.

“There is likely to be a new sheriff in town,” he said.

“I think everybody would like to have a degree of certainty,” Boykin said.

The Lani Kai Island Resort in Fort Myers Beach received about $1 million, which helped cover costs when the Town of Fort Myers Beach ordered hotels closed except for essential personnel for approximately six weeks.

“We were very fortunate to be able to take part in the PPP, which allowed us to keep some staff on during the shutdown,” Lani Kai Marketing Director Melissa Schneider said.

Schneider said the resort also did upgrades and pandemic-safety updates around the property. The funds helped “bring lots more staff back much quicker once the lockdown came to an end. As one of the largest family-owned businesses on the island, we typically have hundreds of employees staffed during season, so we were grateful for this program that allowed us the chance to get our team back to ‘normal’ again much, much sooner,” she added.

In Rubio’s statement Thursday, he said “Businesses need more help to make it through this winter, given a potential second wave looming and impending government lockdowns. Congress has voted unanimously three separate times to fund and enhance PPP and it is far past time for us to come together once again.”

To reach NATHAN MAYBERG, please email nmayberg@breezenewspapers.com