Vermont businesses navigate COVID emergency loan repayments
BERLIN Vermont (WCAX) – The federal government is changing the rules, which could mean thousands of small businesses in Vermont won’t have to pay back the loans they received to stay afloat after the pandemic. As Calvin Cutler reports, companies that received less than $ 50,000 under the Paycheck Protection Program will most likely see most, if not all, of their loans turned into grants through a streamlined process. But for some companies that initially received the loans, turning it into a grant is not as easy as it looks.
At the Twin City Family Fun Center in Berlin, the bowling pins are ready to be knocked down and the comfort food is on the grill.
Bowling manager Harold Bramlitt said the PPP loan saved the business after it was forced to close in March. “Without it, we wouldn’t be open. We have a staff of 30 to 40 people – they would all have been unemployed, ”he said.
With the loan, Bramlitt hired staff for the alleys, the arcade and the restaurant. He is one of more than 13,000 Vermont companies that have collectively received over $ 1 billion. Since he followed federal guidelines – with 60% of the funding going to payroll – much of his loan has been converted into a grant he won’t have to repay. “We spent this money because we didn’t want to end up with a loan that we then had to pay off,” Bramlitt said.
But for others, getting a loan forgiveness from their lender is not as easy as it sounds. The road is strewn with paperwork and nuances. “We get a lot of calls about – ‘How did they qualify? »Did they use the funds correctly? Which forms to use? I don’t understand the criteria, ”said Susan Mazza of the Vermont Small Business Administration.
The SBA is now trying to streamline PPP pardon requests for companies that have received less than $ 50,000. That’s more than 8,000 Vermont businesses that are unlikely to have to repay their loans or will only have to pay a fraction.
“We hope this will allow companies to take it easy, to feel a lot more comfortable that they won’t have to go through all these rules of what an employee is on time. full, which is part-time. You won’t have to worry about that stuff, ”Mazza said.
But companies that have raised more than $ 50,000 and cannot meet the forgiveness requirements will have to repay the P3 loans. For loans issued after June 2, there is a five-year repayment window. For those issued before June 2, companies will have to work with their bank, meaning lenders could request their money earlier.
“As we go along, we’re going to learn a lot about the banks that make it easy, the banks that don’t make it easy, and the loans that may not be completely forgiven and why,” said Leo O ‘Reilly with O’Reilly Business Services, an accounting firm in South Burlington.
Back on the bowling alley, Bramlitt says the loan, along with state grants, has helped keep his doors open. But he says if he had known he had until the end of the year to pay off the loans, he would have used the money differently. “I don’t know if we should apply for more state grants and get more of that money, maybe some but not as much. Then that money is there for someone else who didn’t come to the front line like we did at the start, ”he said.
Along with PPP loans, companies in Vermont have received millions in state aid.
Heads of state will announce a third round of $ 76 million in small business grants on Tuesday.
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