Investment

Minnesota employers received $ 11.2 billion in emergency pandemic aid

From auto dealerships to construction companies, Minnesota employers have raised $ 11.2 billion through the popular Paycheck Protection Program (PPP), ranking state No. 15 in the United States, according to data released Monday by the US Small Business Administration.

The program, which cut unemployment this spring, has helped employers restore more than 51 million jobs in the United States at a time when the economy was collapsing. But many employers have criticized the program, especially retailers and restaurateurs, who say the government essentially pushed them to rehire workers on leave at a time when they were still closed and unable to generate much or no income.

Congress has now agreed to extend the program, which was scheduled to expire on June 30, until August 8 to allow business owners to apply for more than $ 130 billion in remaining funds. A total of 4.9 million employers received a total of $ 521 billion in relief through the program.

Loans are forgivable as long as employers spend at least 60% of funds on payroll, up from 75% in the original bill. The formula was changed by bipartisan legislation co-sponsored by US Representative Dean Phillips, D-Minn.

Now, another Minnesota congressman – Rep. Angie Craig – is leading an effort to pass legislation that would allow business owners to apply for a second P3 loan as long as their sales have declined by at least 50% from the start. of COVID-19.

Treasury Secretary Steven Mnuchin told a House committee last week that the administration supports the idea of ​​providing targeted assistance to businesses that have been hit by the economic downturn.

“Some industries, such as construction, are recovering quickly, while others, such as retail and travel, face longer-term impacts and may require additional relief,” Mnuchin said.

In Minnesota, hotel and restaurant owners would love to have another crack in P3 funds. The state’s hospitality industry received $ 348 million under the PPP.

“I think another wave of relief is going to be needed,” said Ben Wogsland, spokesperson for Hospitality Minnesota, which represents hotels and restaurants statewide. “You have restaurants operating at 50% capacity, and nobody can make money at that rate. They just lose less money. And you have occupancy issues at hotels and resorts.

Although Mnuchin and the SBA initially refused to release the names of PPP loan recipients, they changed course after critics criticized the administration for its lack of transparency. But administration officials still don’t provide exact numbers, but instead categorize loans by size, such as companies that received between $ 5 million and the program’s maximum of $ 10 million. The PPP was open to businesses with 500 or fewer employees, including restaurant chains with no more than 500 employees per outlet.

In Minnesota, 132 employers received at least $ 5 million, including a pig farm in Sleepy Eye, 20 construction companies and eight restaurateurs. Some of the biggest recipients are well known, such as Chanhassen cheese maker Bongards Creameries, Minneapolis law firm Robins Kaplan and D’Amico Holding Company, which operates Italian restaurants in twin towns such as Campiello and D’Amico. & Sounds.

Also receiving at least $ 5 million: The Breck School in Golden Valley, retailer Christopher & Banks, restaurateurs Famous Dave’s and Granite City, and technology provider Loffler Companies. Among the companies that received at least $ 1 million were more than 400 auto and truck dealers, including Duluth Ford, Golden Valley Motors and Peterbilt of Winona.

Healthcare companies and construction companies received the most help. In Minnesota, more than 1,800 construction companies – ranging from large home builders to suppliers – have received at least $ 813 million, at least temporarily saving more than 67,000 jobs.

Industry executives said the aid will help the industry recover much faster than it did after the last recession, which began in 2008 and cut construction spending for three years.

“We are seeing a much faster and much less painful recovery,” said David Siegel, executive director of Housing First Minnesota, which represents 1,100 home builders and suppliers in the state. “That’s why this program works for us. You would have seen a lot of people fired that weren’t fired, because that money gave people a foothold and see what this thing looked like. “

In the health care sector, more than 1,900 employers received at least $ 797 million, helping to retain 128,200 jobs.

The Mankato Clinic, which operates a network of medical facilities in the Mankato and Saint-Pierre region, was reportedly forced to lay off half of its 850 employees without a $ 10 million PPP loan because it had to stop operating. perform elective medical procedures, including higher ones. – revenue services such as MRIs, said CEO Randy Farrow.

The people who were kept on duty were reassigned to other projects that should have been done anyway, including setting up a respiratory clinic with an outdoor space for COVID testing and setting up telehealth services. “We were able to find a lot of stuff for the staff to do,” said Farrow.

At Tri-County Health Care in Wadena, CEO Joel Beiswenger said that between 70 and 90 of the hospital’s 450 employees would have been temporarily or permanently laid off without the $ 5.6 million in PPP and other funds. available.

“It really changed what I called an existential crisis,” Beiswenger said. “We are now very confident that we will be okay with this. “

Among other things, the funding paid for employees to do COVID emergency planning and take on the newly created roles.

The list of government loan recipients contains some inaccuracies. For example, the SBA reported that Planned Parenthood’s regional office in St. Paul received at least $ 5 million through the program, but spokeswoman Emily Bisek said the organization had withdrawn its application and the loan had never been financed.

Missing from the list is Shake Shack, which announced it was making $ 10 million in P3 funds. Shake Shack generated nearly $ 600 million in revenue last year, raising questions about the program’s lack of financial needs testing.

A spokeswoman for the SBA said that a borrower listed in the data as having a PPP loan does not mean that the SBA has determined that the borrower has complied with the rules of the program or is eligible to receive a PPP loan. and a loan discount.

Editor-in-chief Joe Carlson contributed to this story.

Correction:
Previous versions of this article inaccurate the total received by Minnesota employers through the Paycheck Protection Program. It was $ 11.2 billion.

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