PPP loans a boon to region's small businesses, nonprofits
United Community and Family Services, the Norwich-based community health service, received a $6.33 million federal loan this spring as part of the Small Business Administration’s Paycheck Protection Program, which was designed to save jobs amid the coronavirus-induced shutdown.
Among the hundreds of southeastern Connecticut businesses and nonprofits that secured loans, UCFS was the only one to receive one in the $5 million to $10 million range, according to the SBA, which this week disclosed the recipients of loans of $150,000 and up. The loans are forgivable provided the employer maintains or quickly rehires employees and maintains salary levels.
In ascending order, the loan ranges for named recipients were $150,000 to $350,000; $350,000 to $1 million; $1 million to $2 million; $2 million to $5 million; and $5 million to $10 million. Recipients of loans under $150,000 were not publicly named.
Southeastern Connecticut recipients ran the gamut from car dealerships, law firms, contractors and publishers to medical providers, restaurants, hotels, private schools and churches.
Jennifer Granger, the UCFS president and chief executive officer, specified the amount of her organization’s loan, saying it was enabling UCFS to maintain a workforce of more than 350 people engaged in providing medical, dental and behavioral health services. She said the loan has funded health benefits for workers, a critically important benefit in a pandemic.
“We had furloughed 50 people at the end of March and got the loan April 15, which enabled us to bring them back,” Granger said. “It was terrific to be able to do that.”
While the PPP money will last until mid- to late August, other federal support has enabled UCFS to ramp up its COVID-19 testing program and launch and sustain telehealth services. Even with all the federal help, UCFS faces a challenging budget year, Granger said.
The Arc Eastern Connecticut, which serves people with intellectual and developmental disabilities, secured a $2.7 million loan that enabled it to maintain 200 jobs, including benefits, according to Kathleen Stauffer, the CEO.
“We couldn’t have done it without the loan,” she said. “There’s been a lot of uncertainty about when things can open and if they can stay open. Keeping 200 people employed and meeting our other expenses isn’t easy. We have a lot of overhead.”
Stauffer said the cost of the personal protective gear, or PPE, that staffers need is staggering and the PPP loan can’t be used for such a purpose. Last week, an order of disposable gowns cost $24,000, she said.
Norwich Free Academy, the region’s largest high school, landed a loan near the upper end of the $2 million to $5 million range, according to Michael O’Farrell, the school’s communications director, enough to preserve a workforce of more than 300 people.
“It enabled us to keep the focus on education and developing programs in a virtual world and not be concerned about other things,” he said.
Sennheiser Electronic Corp., which has a division in Old Lyme, received a loan in the $2 million to $5 million range, covering payroll expenses for an eight-week period, May 11 to July 3.
"The COVID-19 pandemic has presented us, as with many other companies, with major challenges," Daniella Kohan, a company spokeswoman, wrote in an email. "Sales across the entire headphone market have declined and the cancellation of almost all major concerts and events is having a massive impact on microphone sales. The PPP funds were used to mitigate short term effects of the COVID-19 pandemic on our business by keeping our staff at SEC employed and our operations running."
A spokesman for Mitchell College in New London, which also received a loan in the $2 million to $5 million range, preserving 327 jobs, did not respond to messages seeking comment.
The Day Publishing Co. was among dozens of southeastern Connecticut applicants that received loans in the $1 million to $2 million range. Timothy Dwyer, the publisher, said the newspaper sought and received a $1.8 million loan after its revenues dropped more than 40 percent over March, April and May as a result of the pandemic. He said the money was used to meet payroll costs for 12 weeks.
“The loan allowed us to keep our work force intact while we are facing the challenge of operating a locally owned independent company during a severe recession,” Dwyer said.
A $1,984,000 loan sustained 111 jobs at Mystic Seaport Museum, enabling it to continue operations, reopen to the public after shutting down, and “maintain continuity of care and security for our collections,” Dan McFadden, a museum spokesman, said.
Mystic Aquarium also received a loan in the $1 million to $2 million range.
Chelsea Groton, big lender
The SBA data show that for businesses in southeastern Connecticut, Chelsea Groton Bank was the most prolific lender of PPP funds.
Michael Rauh, the bank’s president and CEO, said the bank gave 556 loans totaling $74 million. The average loan size from Chelsea Groton was $73,000, with the federal government reporting that 120 of its loans were greater than $150,000. Rauh said the loans represented more than 5,000 jobs in the region, which he called a “driving force behind our desire to work around the clock to help these businesses.”
He said the process for administering loans “was a little overwhelming at first,” partially because the Trump administration was touting the program and telling people to get in touch with their banks even before signing the CARES Act into law.
Rauh said the loans are not government money being distributed by banks, but rather the banks’ money covered by a government guarantee. He said Chelsea Groton normally does about 180 small business loans of this type per year, but got 700 requests within a 10-day period this year.
Of the 8,595 loans of $150,000 and up approved for Connecticut applicants, only 123 were approved in June. Last week, the application deadline was extended from June 30 to Aug. 8.
The last local company to get approved for a loan was Groton Ambulance Association, which was approved for a loan in the $150,000 to $350,000 range last Monday and retained 23 jobs, according to the data.
Chet Kaniecki, the association’s president, said Groton Ambulance waited awhile to apply because “we were pretty good financially” and call volume had dropped about 35% due to the pandemic.
But when the economy started to reopen, Kaniecki said, the question became, “What can we do to bring back the level of service to where we need it to be?” He said the process of applying for the loan was “flawless” and that Chelsea Groton “did a tremendous job.”
He said the funding has allowed Groton Ambulance to add a third crew working from noon to midnight.