Over $3.8 billion in loans given to S.C. small businesses to keep workers on payroll
This story was updated on April 21. It reflects an updated total for PPP loans to S.C. businesses.
Over $3.8 billion in loans have gone out to businesses in South Carolina as part of a program meant to keep workers on the payroll and businesses afloat.
As of Monday, 22,933 loans have been given out in South Carolina from lenders as part of the Payroll Protection Program, according to Greg White, S.C. District Director for the Small Business Administration.
White said the total amount given to South Carolina small businesses is $3,807,578,397.
The $349-billion program is a signature part of the CARES Act passed in March. Banks can give out the forgivable loans, that are federally-backed by the SBA, as long as a small businesses spend 75% of it on employee payroll and the remaining 25% on expenses such as rent, mortgages and utilities.
PPP has seen skyrocketing demand across the country and incited fears that funds could run out. As of Monday, over $247 billion of the program’s total $349 billion has already been loaned since PPP began two weeks ago, according to White.
He said 70% of the loans nationwide were for $150,000 or less. The top industries to receive the loans are construction, professional services, accommodations, and retail trade, according to White.
The restaurant industry has been hit particularly hard by the coronavirus Some members of that group, however, have been outraged by what they view as major oversights in the PPP.
The PPP is designed to keep workers on payroll, so that they can keep working during this period, preferably remotely. But for restaurants, full-staffing might not be achievable for months as the pandemic continues to spread.
“Restaurants will remain closed for the next several months in order to keep Americans safe from COVID-19, and when they reopen, it will be many more months before normal rates of socialization lead to full restaurants. If independent restaurants take the loan now, they will just end up laying off their workers again in 8 weeks, and still lack the resources to reopen,” said a note from the Independent Restaurant Coalition, a newly formed group urging Congress to change PPP.
One of the largest restaurant groups on tourism-heavy Hilton Head Island, the Coastal Restaurants And Bars (CRAB) group, was forced to layoff nearly 600 employees due to the state’s ban on dine-in service. Brendan Reilley, owner of CRAB, applied for PPP but is worried about the high-threshold for keeping the loan forgivable.
Reilley said he is also concerned it may saddle restaurants with more debt.
“The PPP was not designed for restaurants and has many holes in it when you are looking at meeting the requirements of forgiveness. In order to meet forgiveness, our wages will be compared to 2019,” said Reilley, in an email. “There is no way our June sales and volume will equal 2019.”
“I am concerned if businesses do not fully understand the loan, they will be digging a deeper hole for their restaurants and maybe one they can’t climb out of,” he said.
The PPP fund could run out before some S.C. businesses that need help get approved for the loans.
Democrats in Congress are still haggling with the Trump administration over extra funding for PPP, according to Axios.
White said the demand for PPP should serve as carrot for Congress to get moving on additional funds for the program.
“It is an incentive for Congress that this much money has gone in such a small period of time,” said White.
The funding, he said, “is especially crucial for small businesses in a state like South Carolina.”
This story was originally published April 14, 2020 at 6:28 PM.
